Fast-Food & Home-Delivery Outlets 2012

Market Report Plus 2012
26th Edition October 2012

Edited by Leah Tutt
ISBN 978-1-84729-918-5
Fast-Food & Home-Delivery Outlets
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Fast-Food & Home-Delivery Outlets Foreword
Key Note Ltd 2012
Contents
Executive Summary 1
1. Market Definition 2
REPORT COVERAGE....................................................................................................................2
MARKET SECTORS.......................................................................................................................2
Sandwiches .....................................................................................................................................3
Burgers ............................................................................................................................................3
Pizza .................................................................................................................................................3
Fish and Chips ................................................................................................................................3
Chicken ............................................................................................................................................4
Other Fast Food/Takeaway .........................................................................................................4
MARKET TRENDS.........................................................................................................................4
Economic Crisis...............................................................................................................................4
Demand for Convenience ............................................................................................................4
Innovation ......................................................................................................................................5
Nutrition and Healthier Products...............................................................................................5
ECONOMIC TRENDS....................................................................................................................6
Table 1.1: UK Economic Trends (000, m, %, million and ), 2007 2011............................7
MARKET POSITION......................................................................................................................9
The UK..............................................................................................................................................9
Table 1.2: The UK Fast-Food Market in Relation to Household Final Consumption
Expenditure on Restaurants, Cafs, Canteens, etc. by Value (m and %),
2007-2011........................................................................................................................................9
Overseas...........................................................................................................................................9
Fast-Food & Home-Delivery Outlets Contents
Key Note Ltd 2012
2. Market Size 11
THE TOTAL MARKET................................................................................................................11
Table 2.1: The Total UK Fast-Food, Takeaway and Home-Delivery Market by Sector
by Value at Current Prices (m at rsp), 2007-2011................................................................11
Figure 2.1: The Total UK Fast-Food, Takeaway and Home-Delivery Market by Sector
Share (%), 2011............................................................................................................................12
BY MARKET SECTOR.................................................................................................................12
Sandwiches ...................................................................................................................................12
Table 2.2: The UK Sandwiches Sector by Value at Current Prices (m at rsp and %),
2007-2011......................................................................................................................................13
Burgers...........................................................................................................................................13
Table 2.3: The UK Burgers Sector by Value at Current Prices
(m at rsp and %), 2007-2011...................................................................................................14
Pizza................................................................................................................................................14
Table 2.4: The UK Pizza Sector by Value at Current Prices
(m at rsp and %), 2007-2011...................................................................................................15
Fish and Chips...............................................................................................................................15
Table 2.5: The UK Fish and Chips Sector by Value at Current Prices
(m at rsp and %), 2007-2011...................................................................................................16
Chicken...........................................................................................................................................17
Table 2.6: The UK Chicken Sector by Value at Current Prices
(m at rsp and %), 2007-2011...................................................................................................17
Other Fast-Food and Takeaway Outlets .................................................................................18
Table 2.7: The UK Other Fast-Food and Takeaway Outlets Sector by Value at Current
Prices (m at rsp and %), 2007-2011........................................................................................18
3. Industry Background 19
RECENT HISTORY.......................................................................................................................19
NUMBER OF COMPANIES.......................................................................................................19
Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises Engaged as
Restaurants, Cafs and Takeaways by Turnover Sizeband (000, number and %),
2010 and 2011..............................................................................................................................20
EMPLOYMENT............................................................................................................................20
Table 3.2: Number of Employees in the Restaurant Industry
in Great Britain (000), 2007-2011..............................................................................................21
Restaurants, Cafs and Takeaways by Employment Sizeband (number and %), 2010
and 2011........................................................................................................................................21
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REGIONAL VARIATIONS IN THE MARKETPLACE.............................................................22
Restaurants, Cafs and Takeaways by Government Office Region (number and %),
2011................................................................................................................................................23
Table 3.5: Adults Who Have Eaten Takeaway Foods and Adults Who Have Eaten
Fast Foods in Outlets in the Last 12 Months by Region (% of adults), 2012...................24
DISTRIBUTION.............................................................................................................................24
Table 3.6: Selected UK Fast-Food and Takeaway Chains
by Sector and Estimated Number of Outlets, 2011...............................................................25
HOW ROBUST IS THE MARKET?...........................................................................................25
Table 3.7: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
as Restaurants and Takeaways by Age of Business (number and %), 2011.....................26
LEGISLATION...............................................................................................................................26
KEY TRADE ASSOCIATIONS....................................................................................................27
British Hospitality Association ..................................................................................................27
Hotels, Restaurants and Cafs in Europe................................................................................27
The Pizza, Pasta and Italian Food Association.......................................................................27
4. Competitor Analysis 28
THE MARKETPLACE..................................................................................................................28
MARKET LEADERS.....................................................................................................................28
Burger King (UK) Ltd ..................................................................................................................28
Dominos Pizza Group PLC.........................................................................................................30
Greggs PLC.....................................................................................................................................31
Kentucky Fried Chicken (GB) Ltd .............................................................................................32
McDonalds Restaurants Ltd .....................................................................................................34
Pizza Hut (UK) Ltd........................................................................................................................35
Select Service Partner UK Ltd ...................................................................................................36
Subway Realty Ltd ......................................................................................................................37
Other Companies.........................................................................................................................38
OUTSIDE SUPPLIERS..................................................................................................................39
MARKETING ACTIVITY.............................................................................................................39
Table 4.1: Main Media Advertising Expenditure by Fast-Food Chains (000), Years
Ending March 2008-2012............................................................................................................39
Figure 4.1: Main Media Advertising Expenditure by Fast-Food Chains (000), Year
Ending March 2012......................................................................................................................40
Key Note Ltd 2012
5. Brand Strategy 41
INTRODUCTION..........................................................................................................................41
COMPANIES BRANDS..............................................................................................................41
Burger King...................................................................................................................................41
Dominos Pizza.............................................................................................................................42
KFC..................................................................................................................................................42
McDonalds ...................................................................................................................................43
Pizza Hut........................................................................................................................................43
Subway...........................................................................................................................................44
MAIN MEDIA ADVERTISING EXPENDITURE .....................................................................44
Table 5.1: Main Media Advertising Expenditure
on Leading Fast-Food Brands (000 and %), Years Ending
March 2011 and March 2012.....................................................................................................44
6. Strengths, Weaknesses, Opportunities and Threats 48
STRENGTHS..................................................................................................................................48
WEAKNESSES..............................................................................................................................48
OPPORTUNITIES.........................................................................................................................49
THREATS.......................................................................................................................................49
7. Buying Behaviour 51
INTRODUCTION .........................................................................................................................51
VALUE............................................................................................................................................51
Table 7.1: Adults Who Agreed That Major Fast-Food
and Home-Delivery Outlets Offer Good Value for Money
(% of adults), August 2012........................................................................................................52
Table 7.2: Adults Who Agreed That They Tend to Eat Fast Food to Save Money
During the Recession (% of adults), August 2012.................................................................55
CONVENIENCE ...........................................................................................................................57
Table 7.3: Adults Who Agreed That They Tend to Eat Fast Food and Takeaways
to Save Time and Effort (% of adults), August 2012............................................................58
NUTRITION...................................................................................................................................61
Table 7.4: Adults Who Think About Calories When They Order Fast Food
and Takeaways (% of adults), August 2012 ..........................................................................62
Table 7.5: Adults Who Agreed That They Try to Avoid Fast Food and Takeaways
Because They Consider Them Unhealthy (% of adults), August 2012..............................65
Table 7.6: Adults Who Agreed That They Would Eat More Fast Food If There Were
More Healthy Options on the Menu (% of adults), August 2012......................................69
Key Note Ltd 2012
Table 7.7: Adults Who Agreed That Fast-Food Restaurants
and Home-Delivery Outlets Now Offer Healthier Options
Than 5 Years Ago (% of adults), August 2012.......................................................................72
Table 7.8: Adults Who Consider the Food on Offer Better Quality than 5 Years Ago
(% of adults), August 2012........................................................................................................75
8. Current Issues 78
TECHNOLOGY ............................................................................................................................78
Contactless Payments..................................................................................................................78
Wi-Fi Access...................................................................................................................................78
Social Media Advertising Campaigns.......................................................................................79
Electronic Menu Boards and Other Digital Gadgets.............................................................80
POLITICAL ISSUES .....................................................................................................................81
Public Health Responsibility Deal ............................................................................................81
Fast-food Employers Abandon Jobless Work Experience ...................................................81
Pasty Tax .......................................................................................................................................82
CORPORATE SOCIAL RESPONSIBILITY ...............................................................................82
Social Causes ................................................................................................................................82
Environmental and Animal Welfare Concerns ......................................................................83
Ethical Sourcing and Supporting British Trade .....................................................................84
CORPORATE ACTIVITY.............................................................................................................85
Burger King (UK) Ltd...................................................................................................................85
Dominos Pizza Group PLC ........................................................................................................85
KFC (GB) Ltd..................................................................................................................................85
Pizza Hut (UK) Ltd........................................................................................................................86
Select Service Partner UK Ltd ...................................................................................................86
9. The Global Market 87
INTRODUCTION..........................................................................................................................87
GLOBAL CORPORATIONS........................................................................................................87
McDonalds Corporation............................................................................................................87
Table 9.1: McDonalds Corporation Number of Restaurants by Type, Years Ending
31st December 2009-2011..........................................................................................................87
Table 9.2: McDonalds Corporation Number of Restaurants by Region, Years
Ending 31st December 2009-2011............................................................................................88
Table 9.3: McDonalds Corporation Revenues by Type ($m), Years Ending
31st December 2009-2011..........................................................................................................89
Yum! Brands Inc...........................................................................................................................89
Table 9.4: Yum! Brands Inc Number of System Restaurants
by Type of Ownership, 2009-2011............................................................................................89
Table 9.5: Number of Yum! Brands Inc System Restaurants by Brand, 2011...................90
Key Note Ltd 2012
Table 9.6: Yum! Brands Inc Revenues by Company
and Franchised Sales ($m), 2009-2011.....................................................................................91
Burger King Worldwide..............................................................................................................91
Table 9.7: Burger King Holdings Inc Number of Restaurants by Type, Years Ending
30th June 2009-2011...................................................................................................................92
Table 9.8: Burger King Holdings Inc Revenues by Source ($m), Year Ending
30th June 2009-2011...................................................................................................................93
Table 9.9: Burger King Holdings Inc Revenues by Region ($m), Years Ending
30th June 2009-2011...................................................................................................................93
10. Forecasts 94
INTRODUCTION..........................................................................................................................94
General Economic Forecasts......................................................................................................94
Table 10.1: Economic Forecasts (000, % and million), 2012-2016......................................94
FORECASTS 2012 TO 2016......................................................................................................95
Table 10.2: The Forecast UK Fast-Food, Takeaway
and Home-Delivery Market by Sector by Value at Current Prices
(m at rsp), 2012-2016.................................................................................................................95
Figure 10.1: The Forecast UK Fast-Food, Takeaway and Home-Delivery Market
by Sector by value at Current Prices (m at rsp), 2012-2016...............................................97
MARKET GROWTH....................................................................................................................97
Figure 10.2: Growth in the UK Fast-Food, Takeaway
and Home-Delivery Market by Valye at Current Prices (m at rsp), 2007-2016..............98
FUTURE TRENDS.........................................................................................................................98
Social Media Campaigns.............................................................................................................98
Exotic Flavours and Innovative Products.................................................................................99
Healthier Options ........................................................................................................................99
Greater Use of Quality Ingredients..........................................................................................99
Value...............................................................................................................................................99
11. Company Profiles 100
BURGER KING (UK) LTD.........................................................................................................101
DOMINOS PIZZA GROUP PLC.............................................................................................103
GREGGS PLC...............................................................................................................................105
KENTUCKY FRIED CHICKEN (GB) LTD...............................................................................107
MCDONALDS RESTAURANTS LTD.....................................................................................109
PIZZA HUT (UK) LTD...............................................................................................................111
SUBWAY REALTY LTD............................................................................................................113
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12. Company Financials 115
13. Further Sources 117
Publications...............................................................................................................................117
General Sources.......................................................................................................................118
Government Publications ....................................................................................................119
Other Sources...........................................................................................................................119
Key Note Sources ....................................................................................................................120
Understanding Consumer Survey Data 122
Number, Profile, Penetration..............................................................................................122
Social Grade...............................................................................................................................123
Standard Region......................................................................................................................123
Key Note Research 124
The Key Note Range of Reports 125
Key Note Ltd 2012
The recession and the subsequent
squeeze on disposable income has
encouraged millions of families to cut
back on spending on luxuries,
especially on meals in restaurants. This
has encouraged many to trade down to
cheaper meals, especially burgers and
fried chicken.
(The Telegraph, 15th January 2012)
Over the past few years, weve
worked hard to open up our business,
both online and offline. However,
there are still lots of myths out there
about McDonalds, and lots of things
that people simply dont know about
us.
Alastair Macrow, Vice-President of Marketing
at McDonalds UK
(Marketing Magazine, 15th May 2012)
A recent survey by the consumer
group Which? found that two out of
three adults would like to see the
calorie information clearly displayed
on all fast-food products.
(Pizza News, 22nd September 2011)
Increasingly, people are contacting
brands through Facebook and Twitter
instead of making a phone call.
Rick Maynard, KFC spokesperson
(http://www.thedrum.co.uk, 21st February 2012)
Fast-Food & Home-Delivery Outlets
Key Note Ltd 2012
Executive Summary
This Key Note Market Report Plus analyses the fast-food and home-delivery
industry in the UK. Key Note calculates that the market grew by 6% in 2011.
It divides the market into six principle categories by type of food: sandwiches,
burgers, pizza, fish and chips, chicken, and other fast food or takeaway. The
segment for sandwiches is the largest subsector and accounted for 31.3% of
the market in 2011, followed by the burgers sector (23%). In 2011, the share
of the fish and chips sector stood at 10.5%, while the share of the pizza stood
at 11.6%. Although the smallest sector overall, chicken has undergone the
fastest growth since 2007, increasing its market share by 0.4 percentage points
to 7.3% of the market. The sector for other fast-food and takeaway outlets,
which encompasses all other cuisines from sushi to kebabs increased by
8.9% in 2011 to account for 16.3% of the market.
There are three different types of enterprises that are active in the market:
branded fast-food restaurants, independently owned businesses and
traditional takeaway outlets. The major chains in the UK are Greggs,
McDonalds, Burger King, Subway, Dominos Pizza, Kentucky Fried Chicken
(KFC) and Pizza Hut.
In spite of the economic crisis, the overall fast-food and home-delivery industry
has remained resilient. The good value and convenience that this type of
restaurant offers makes it popular among consumers in the UK. When eating
out, Britons are increasingly opting to eat more fast food. Its inexpensiveness
has been a key factor in this trend. Moreover, consumers lead increasingly
fast-paced lifestyles, and as a result, they are eating their meals on-the-go, as
well as looking for hassle-free solutions, which are prepared easily and quickly
two defining traits of fast food and takeaways. These factors are giving the
total industry an advantage over competitors. Moreover, an influx in
innovative flavours and healthier products in the market has helped to boost
companies sales, by bringing new excitement to menus, offering more choice
to consumers than ever before and appealing to a broader consumer base.
Still, the negative association between fast food and poor quality and
unhealthy foods continues to plague the industry. Companies are often
criticised and blamed for their contributory role to the obesity epidemic in the
UK. As a result, chains are taking a proactive role to combat this image, by
taking part in the Governments Public Health Responsibility Deal, committing
themselves to social and environmental causes and placing calorie counts on
menu boards, as well as launching media campaigns that attempt to improve
the reputation of the industry.
Key Note expects that the fast-food and home-delivery industry will continue
to increase over the next 5 years. Value, flavour and the development of
healthier fast-food products, as well as interactive social media campaigns, will
be at the core of future growth. The persistence of the economic crisis and
consumers hectic schedules will continue to drive demand in the fast-food and
home-delivery industry, which is expected to grow by 24.5% between 2012 and
2016.
Fast-Food & Home-Delivery Outlets Executive Summary
Key Note Ltd 2012 1
1. Market Definition
REPORT COVERAGE
This Market Report Plus separates the fast-food and home-delivery industry
into the following categories:
Branded fast-food restaurants these sell both hot and cold food that can
be eaten either in restaurants or taken away. Well-known fast-food chains
include McDonalds, Kentucky Fried Chicken (KFC) and Dominos Pizza.
Independently owned businesses companies that are classified under this
heading are cafs, takeaways, kiosks and counters that sell eat-in or
takeaway foods in conjunction with hot and cold beverages, with the
exception of alcohol. Of the foods covered by the fast-food and home-
delivery market, sandwiches are the primary products sold by these
businesses. These include paninis, baguettes and bagels. Other foods
commonly found in these types of outlets are muffins, cakes and doughnuts.
Tea rooms and ice cream parlours fall into this category.
Traditional takeaway outlets fish and chips, Chinese and kebab shops are
common in this category. The sector also includes venues that sell products
such as sandwiches, pizza, chicken and jacket potatoes. Ethnic variety is
abundant in the segment. Many of these businesses are independent
operations. Some of these restaurants also offer home-delivery services, but
those with eat-in areas are not covered in this report.
The industry is dominated by fast-food chains and independent takeaway
outlets. These can be found on the high street and in various other locations,
including shopping malls, transport stations and terminals, leisure parks and
petrol stations. The businesses form part of the hospitality industry, a pillar in
the UKs economy.
Small-scale catering units, such as motor vans, that can be found at festivals
and along roadsides are excluded from the analysis. It is important to note that
Key Note changed its definition of the market in 2010. Coffee shops and
sandwich sales from retail outlets and chemists are no longer covered by the
report. Details on these can be found in Key Notes Coffee & Sandwich Shops
Market Assessment.
MARKET SECTORS
Key Note classifies the fast-food and home-delivery market according to the
type of food primarily sold by companies in the industry. These are:
sandwiches
burgers
Fast-Food & Home-Delivery Outlets Market Definition
Key Note Ltd 2012 2
pizza
fish and chips
chicken
other fast food or takeaway.
Sandwiches
The sector for sandwiches is the largest in the fast-food and home-delivery
industry. An array of sandwiches make up the segment. Traditional variants
remain popular though innovative and original filling flavours, as well as
alternative breads, are increasingly present in the section. The primary
companies active in the category in the UK are Greggs and Subway. Sales in
the subsector are being driven by the demand for on-the-go products,
including the rise of the on-the-go breakfast occasion.
Burgers
Burgers are traditionally associated with US fast-food joints, particularly
McDonalds and Burger King. Although the category is not the dominant sector
in the UK, the presence of the products is nevertheless important. Moreover,
the market is actually saturated with burgers. As a result, companies are
increasingly giving traditional burgers innovative twists to remain competitive:
offering various meats, introducing exciting flavours and adding different
buns.
Pizza
Pizza is the most commonly delivered food in the fast-food and home-delivery
industry in the UK. This feature caters well to the demand for convenience in
the UK, as consumers can now place orders online or via their mobiles wherever
they may be and have the pizza delivered straight to their home, making the
mealtime solution hassle-free. Moreover, innovation has boosted sales in the
category. Companies are introducing lighter versions, premium pizza and
innovative crusts and flavours to maximise sales. Two major chains are active
in the segment, Dominos Pizza and Pizza Hut, as well as a series of
independent operators in towns and cities across the UK.
Fish and Chips
Fish and chips is an iconic dish in the UK. Although a national symbol, the sector
has struggled in recent times compared with other categories in the market.
Independent businesses account for the majority of the segment. These
companies are struggling to cope with the economic crisis and some are being
forced out of business. Moreover, not only do firms have to deal with rising
operational and production costs, but the issue of sustainability, which is now
at the core of the fishing industry, is putting an even greater strain on the
section.
Key Note Ltd 2012 3
Chicken
Chicken is increasingly being used in the fast-food and home-delivery industry
as a healthier alternative to red meat. KFC is the major chain that specialises
in the product, though other companies also use poultry for meals including
salads, pizzas, sandwiches, burgers and wraps.
Other Fast Food/Takeaway
The other fast food/takeaway category covers a broad range of products from
different ethnic backgrounds. This subsector is increasingly popular in the UK,
as consumers are becoming more adventurous in their food choices. Chinese,
Indian and kebab shops traditionally dominate the segment, but Mexican,
Caribbean and Thai, among others, are gaining importance in the sector.
MARKET TRENDS
Economic Crisis
The fast-food and home-delivery industry is benefitting from the economic
crisis. The value it offers means that consumers are increasingly opting for this
type of restaurant when eating out, as an economical mealtime solution. On
15th January 2012, in The Telegraph it was written that:
The recession, and the subsequent squeeze on disposable
income, has encouraged millions of families to cut back on
spending on luxuries, especially on meals in restaurants. This has
encouraged many to trade down to cheaper meals, especially
burgers and fried chicken.
Fast-food now makes up more than half of all meals eaten out of the home.
The article quotes figures by the NPD Group, a market research company that
tracks consumer spending, which found that, in 2011, 5.54 billion visits to
restaurants were made to fast-food and takeaway chains out of a total 11
billion. Thus, although consumers are eating out less frequently than prior to
the recession in 2008, when they do dine out, more and more are opting for
fast food instead of other types of restaurants.
Demand for Convenience
Britons are leading increasingly fast-paced lifestyles. With busier schedules,
consumers have less time to prepare and eat meals from scratch. Not only do
they not have the time, but many do not want to put in the effort required in
the process, especially after a hard-working day. In addition, an increasing
percentage of the population is eating food on-the-go, instead of sitting down
and having a proper meal, as they no longer have the time to do so.
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The fast-food and home-delivery industry is in a prime position to benefit from
the rising demand for convenient meal solutions due to consumers
increasingly hectic lives. Not only do these restaurants offer good value, but
consumers hardly have to wait for the food to be ready. Moreover, they can
decide whether to eat the meal in the venue or take it away. Furthermore,
certain businesses offer delivery services, meaning that consumers can even
enjoy the food from the comfort of their home without having to put in any
effort. This phenomenon is one of the primary reasons for the industrys success
in the UK.
Innovation
Although there is a strong demand for fast food and takeaways in the UK, the
market is saturated with products and restaurants. In order to differentiate
themselves, companies are increasingly resorting to innovation to maintain
dynamism in the industry. Moreover, consumers are becoming more and more
adventurous when it comes to food and there is a growing demand for exciting
and original flavours that tickle the palate in the industry in the UK. Examples
that support this trend include Burger Kings Angus XT Ploughmans and lamb
burger and KFCs Reggae Reggae Box Meal. There has also been a surge in
premium products, such as Dominos Pizza Gourmet and Pizza Huts Posh
ranges. This innovation marks an attempt by chains not only to push the value
of the industry, but also to break away from the association of fast food with
poor quality. In addition, companies are trying to appeal to a broader
consumer base by offering more variety on their menus. Healthier recipes are
also being developed, as explained below.
Nutrition and Healthier Products
Britons are increasingly conscious of the importance of leading a healthy
lifestyle, both in terms of food and exercise, due to efforts by the media, the
Government and organisations to raise awareness. In the process, the fast-food
industry is often blamed for playing a contributory role in the obesity epidemic
that is affecting the nation. Food in the market is often fried and high in fat,
salt and sugar. In response, companies are making a conscious effort to break
away from this stereotype by limiting the number of calories in recipes, playing
an active role in campaigns that promote healthier lifestyles and by stressing
their achievements to consumers.
Menu boards that display calorie content, salads and smoothies are
increasingly being found in fast-food restaurants, and the trend has been a key
component of innovation in the industry. McDonalds Deli Choices, Pizza Huts
Pizzetta range and Subways Low Fat Subs are all designed to offer consumers
an alternative to traditional fast food. Companies are catering for consumers
growing demand for healthier options by widening their product portfolio to
offer these types of products, which were not originally present in the market.
Key Note Ltd 2012 5
The main chains in the industry have also signed up to the Governments Public
Health Responsibility Deal. In addition to promoting exercise, such as Burger
Kings Be Active campaign, companies are highlighting their participation in
the removal of unhealthy ingredients from the recipes. For example, on
7th September 2011, Subway published a press release that described its
contribution to the healthier foods initiative. It removed artificial trans fat
from all of its products in 2009, as well as making a conscious effort to reduce
salt levels in its food. Furthermore, the company has signed up to the
Governments 2012 salt target. According to the article, Subway supports the
display of calories on menu boards across the UK. In addition, on
5th March 2012, KFC announced its decision to stop using palm oil. This is not
only to improve its environmental impact, but also to ameliorate the
nutritional content of its food by reducing the levels of saturated fats in the
products. It plans to gradually replace it with rapeseed oil instead.
Fast-food and home-delivery companies have been keen to emphasise their
achievements in the domain. For example, McDonalds has been stressing the
fact that its innovative drink, Fruitizz, contains no added sugar, artificial
colours or flavours, and also contributes to one of childrens 5-a-day. Subways
London 2012 advertisement features the number of calories per sandwich to
highlight how healthy they are. Pizza Huts website states, in text that stands
out, that salad at the restaurant is free all day, every day. Businesses hope that
this strategy will improve the reputation of the industry, as one which offers
not just value and convenience, but also good quality and nutritious products.
ECONOMIC TRENDS
In addition to market trends, economic factors affect the fast-food and
home-delivery industry in the UK. Table 1.1 summarises population levels and
the state of the economy over the past 5 years. Population, gross domestic
product (GDP), inflation, unemployment and household disposable income
help to determine the state of the environment within which companies
operate.
The population in the UK is growing exponentially. Between 2007 and 2011,
it increased by 2.9% to 62.7 million. The rise is due to a combination of both
immigration and natural births. A growing population is favourable for the
fast-food and home-delivery industry, as it augments its potential consumer
base. This is further boosted by the fact that the restaurants are considered to
be family friendly with family deals and meals, play areas and toys for children.
The economic crisis struck the UK in 2008 at the start of the recession. In spite
of Government efforts, the downturn is persisting. In 2011, GDP growth
slowed, inflation increased and unemployment deteriorated by 2% to 1.53
million. Although household disposable income has risen year-on-year since
2007, consumers are facing their biggest spending squeeze since 1982,
according to a Retail Economics article published on 25th October 2011. This is
due to the simultaneous increase in food, living and energy costs in the UK.
Key Note Ltd 2012 6
Table 1.1: UK Economic Trends (000, m, %, million and ),
2007 2011
2007 2008 2009 2010 2011
Resident Population
Estimates (000)
Mid-Years
Female 31,068 31,244 31,418 31,619 31,833
Male 29,918 30,154 30,374 30,643 30,902
Total
population 60,986 61,398 61,792 62,262 62,735
% change
year-on-year - 0.7 0.6 0.8 0.8
Gross Domestic
Product (m)
Current prices 1,412,119 1,440,931 1,401,863 1,466,569 1,516,153
% change
year-on-year - 2.0 -2.7 4.6 3.4
Annual
chain-linked GDP 1,474,153 1,459,885 1,401,863 1,427,087 1,437,909
% change
year-on-year - -1.0 -4.0 1.8 0.8
Rate of Inflation (%)
Inflation 4.3 4.0 -0.5 4.6 5.2
Percentage point
change
year-on-year - -0.3 -4.5 5.1 0.6
Actual Number of
Unemployed Persons
in the UK (million)
Actual number of
claimants 0.86 0.91 1.53 1.50 1.53
% change
year-on-year - 5.8 68.1 -2.0 2.0
Table continues...
Key Note Ltd 2012 7
Table 1.1: UK Economic Trends (000, m, %, million and ),
2007 2011
...table continued
2007 2008 2009 2010 2011
Household Disposable
Income Per Capita ()
Household
disposable
income 14,305 14,733 15,109 15,619 16,042
% change
year-on-year - 3.0 2.6 3.4 2.7
% change
year-on-year - 3.0 2.4 3.1 1.9
GDP gross domestic product
Note: inflation is at retail price index (RPI); inflation data shown are annual average
changes; claimant count measures the number of people claiming Jobseekers Allowance.
Source: Population Estimates for UK, England and Wales, Scotland and Northern
Ireland Population Estimates Timeseries 1971 to Current Year, December 2011/
National Population Projections, 2010-based projections/United Kingdom
Economic Accounts, July 2012/Consumer Price Indices, July 2012/Labour Market
Statistics, August 2012, National Statistics website Crown copyright material is
reproduced with the permission of the Controller of HMSO (and the Queens
Printer for Scotland)
Hard times and tightened consumer purse strings have actually benefitted the
fast-food and home-delivery industry. The ability of the restaurants to offer
Britons good value has boosted sales and profit for companies in the market.
This trend is evidenced by the fact that there is a growing number of fast-food
and home-delivery venues in the UK. Still, the smaller businesses in the industry
are more likely to be struggling with the tough climate and rising production
and operational costs. As a result, chains are increasing their presence in the
market, as they are better able to offer cheap deals and have the economic
resources to weather the storm.
Key Note Ltd 2012 8
MARKET POSITION
The UK
The amount households spend on fast-food, takeaways and home-delivery
meals represents approximately 13.3% of their overall expenditure on
restaurants, cafs, canteens and other types of restaurants in the UK in 2011.
The industry has increased its market share by 1.5 percentage points since 2007.
These figures support the fact that Britons are increasingly opting to eat value
fast food when dining out during the economic crisis, as well as choosing
takeaways and home deliveries as convenient mealtime solutions, since they
are hassle-free.
Table 1.2: The UK Fast-Food Market in Relation to Household
Final Consumption Expenditure on Restaurants, Cafs,
Canteens, etc. by Value (m and %), 2007-2011
2007 2008 2009 2010 2011
Household expenditure
on restaurants, cafs,
canteens, etc. (m) 73,003 73,991 70,778 75,363 77,577
Total fast-food,
takeaway and
home-delivery market
(m) 8,592 8,925 9,263 9,702 10,283
Fast-food, takeaway
and home-delivery
market as a % of
household expenditure
on restaurants, cafs,
canteens, etc. 11.8 12.1 13.1 12.9 13.3
Note: figures are at current prices and are not seasonally adjusted.
Source: Consumer Trends Quarter 1 2012, National Statistics Crown copyright
material is reproduced with the permission of the Controller of HMSO (and the
Queens Printer for Scotland)/Key Note
Overseas
The US and the UK were the two original markets for the fast-food and
home-delivery industry. Although these markets remain important, they are
becoming saturated with products and venues. Moreover, competition in these
markets is intense.
Key Note Ltd 2012 9
However, fast-food and home-delivery chains are pinning their hopes for
future growth on emerging economies, particularly the Peoples Republic of
China (PRC), as well as Latin America, the Middle East and Eastern Europe
regions, in addition to France and Germany in the West. The fast-expanding
middle class in newly industrialised states is driving a demand for fast-food and
takeaways, as consumers want to spend their newfound wealth.
In spite of a general global demand for fast food, companies still have to
modify their menus to suit local culture and preferences. For example, in Japan,
McDonalds sells Ebi Filet-O, which is made with shrimps, lettuce and a
Thousand Island sauce in a steamed bun; while in Germany, the company sells
Big Rsti, a beef patty with a crispy potato pancake, bacon, cheese and cheese
sauce in a bacon-and-cheese bun. In India, Taco Bell sells a Fajita and Paneer
Grilled Stuffed Burrito that comes with paneer, beans, rice, fajita, vegetables,
cheese sauce, salsa and cheese. In France, Dominos sells a Kebaba pizza, which
is inspired by kebabs and includes jalapeos, crme fraiche and garlic, as well
as a Savoyarde version that is made with crme fraiche , mozzarella, potatoes
and Reblochon cheese.
Key Note Ltd 2012 10
2. Market Size
THE TOTAL MARKET
Key Note calculates that the fast-food, takeaway and home-delivery market is
presently worth 10.28bn after growing by 6% in 2011. The industry has
experienced year-on-year growth since 2007. Overall, its value has risen by
19.7% over the covered period. Moreover, with the exception of 2009, when
the rate slowed by 0.1 percentage points, its momentum increased as the years
went by. All subsectors increased in value during the time period.
Table 2.1: The Total UK Fast-Food, Takeaway and Home-Delivery
Market by Sector by Value at Current Prices (m at rsp),
2007-2011
2007 2008 2009 2010 2011
Sandwiches 2,678 2,800 2,903 3,045 3,217
Burgers 2,015 2,065 2,140 2,230 2,368
Pizza 1,020 1,055 1,090 1,124 1,192
Fish and chips 989 1,015 1,040 1,061 1,077
Chicken 590 625 660 700 749
Other fast-food/
takeaway outlets 1,300 1,365 1,430 1,542 1,680
Total 8,592 8,925 9,263 9,702 10,283
% change year-on-year - 3.9 3.8 4.7 6.0
rsp retail selling prices
Source: Key Note
In spite of the economic crisis, the fast-food, takeaway and home-delivery
industry has gained in value over the past 5 years. Furthermore, the market has
actually benefitted from the downturn. Tighter purse strings mean that
consumers are opting for good value when eating out. This has given fast-food
restaurants an advantage over other types of restaurants.
Fast-Food & Home-Delivery Outlets Market Size
According to a report by the British Hospitality Association (BHA) entitled
British Hospitality: Trends & Developments 2011, the quick-service sector is the
sole category to have experienced year-on-year growth since 2007. Consumers
increasingly hectic lifestyles has also worked to the industrys advantage, as
customers opt for easy and hassle-free mealtime solutions by popping into
fast-food joints and ordering takeaways and home deliveries. The market share
of the different sectors, as estimated by Key Note, is depicted in Figure 2.1,
below.
Figure 2.1: The Total UK Fast-Food, Takeaway
and Home-Delivery Market by Sector Share (%), 2011
Other fast-
food/takea
way outlets
16.3%
Chicken
7.3%
Fish and chips
10.5%
Pizza
11.6%
Sandwiches
31.3%
Burgers
23.0%
Source: Key Note
BY MARKET SECTOR
Sandwiches
The sandwiches sector is valued at 3.22bn after growing by 5.6% in 2011. In
spite of this growth, the segment lost 0.1 percentage points from its market
share over the course of the year. Still, it remains 0.1 percentage points above
2007 levels. Since 2007, the category has increased by 20.1%. Sandwiches
represent the largest market share in the fast-food, takeaway and
home-delivery market, accounting for almost a third of the market (31.3%).
Table 2.2: The UK Sandwiches Sector by Value at Current Prices
(m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Sandwiches 2,678 2,800 2,903 3,045 3,217
Share of total fast-food,
takeaway and
(%) 31.2 31.4 31.3 31.4 31.3
Source: Key Note
Sandwiches are popular with consumers. They are convenient and can be eaten
on-the-go. Moreover, the rise of premium sandwiches with exciting fillings and
made using alternative breads, such as wraps, has boosted sales in the category.
Furthermore, sandwiches are perceived by consumers to be healthier than
other products in the industry, including burgers and pizza, and are therefore
more favourable among health-conscious consumers.
However, cash-strained consumers are finding ways to save money during the
economic crisis. As a result, an increasing proportion of consumers are opting
to make their own sandwiches at home, instead of purchasing them from
outlets. The effect of this trend is evident in the slight fall in the categorys
overall market share in 2011.
Burgers
The burgers category increased by 6.2% in 2011 to 2.37bn. Its growth rate has
grown steadily every year since 2007, indicating the popularity of the sector.
Nevertheless, its market share fell by 0.5 percentage points during the 5-year
period. Key Note accredits the growing presence of alternative meals for its
decline. Products, such as Burger Kings Sweet Chilli Chicken Wrap and Veggie
Wrap, as well as McDonalds Deli Choices range, are eating into the market
share of the burgers sector.
Table 2.3: The UK Burgers Sector by Value at Current Prices
(m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Burgers 2,015 2,065 2,140 2,230 2,368
takeaway and
home-delivery market (%) 23.5 23.1 23.1 23.0 23.0
Source: Key Note
Burgers presently account for 23% of the total fast-food, takeaway and
home-delivery market. McDonalds, alone, is responsible for roughly half the
burgers market in the UK. The days of the ordinary burgers are over. Chains
are adding new ingredients or using replacements to differentiate their
burgers from competitors. Examples include The M at McDonalds, which has
ingredients, such as Emmental cheese and a dressing, and is surrounded by a
stone-baked Ciabatta-style roll instead of a bun; as well as Burger Kings Angus
XT Ploughmans, which comes with Irish cheddar and Red Leicester cheeses, in
addition to a sweet vegetable pickle, white onions, iceberg lettuce, tomato
and mayonnaise. These products additionally aim to add value to the category.
Pizza
In 2011, the pizza subsector rose by 6% to 1.19bn in the UK. Its growth rate
nearly doubled compared to previous years. Since 2007, the category has
increased its value by 16.9%. However, its market share has declined by 0.3
percentage points. As with burgers, Key Note attributes this to consumers
expanding sensitivity to calories, fat and salt content in fast food. Still, its
growth rate demonstrates that the products remain popular.
Table 2.4: The UK Pizza Sector by Value at Current Prices
(m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Pizza 1,020 1,055 1,090 1,124 1,192
takeaway and
(%) 11.9 11.8 11.8 11.6 11.6
Source: Key Note
With the financial strain of the economic crisis, pizzas are an economical
solution for consumers, who are staying at home in an effort to save money.
Whether they are relaxing or entertaining, consumers are ordering takeaway
and home-delivery pizzas due to their convenience. Moreover, innovation in
the category and the introduction of healthier and premium versions has
helped to boost sales.
In order to compete with chilled and frozen pizzas sold in supermarkets,
companies are utilising online and smartphone ordering services. This gives
consumers the extra practicality of not having to take time out of their busy
day to go to the store. Papa Johns allows customers to make orders via its
online website, while Dominos has been at the forefront of applications
(apps) in the fast-food, takeaway and home-delivery industry in the UK.
Fish and Chips
Fish and chips is the sole sector whose growth rate slowed in 2011. The
categorys value rose by 1.5% to 1.08bn. Moreover, its market share has fallen
more than any other sector in the market since 2007 by 1 percentage point.
Still, its value has increased by 8.9% during the covered period.
Table 2.5: The UK Fish and Chips Sector by Value at Current
Prices (m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Fish and chips 989 1,015 1,040 1,061 1,077
Share of total-fast
food, takeaway and
(%) 11.5 11.4 11.2 10.9 10.5
Source: Key Note
The fish and chips sector has suffered more than any other category in the
fast-food, takeaway and home-delivery industry as a result of the economic
crisis. Fish and chip shops have always benefitted from consumers nights out
in the UK. Following an evening of drinking, dancing and socialising, it is
common to stop by the chippy on the way home for some food. However,
consumers are now limiting the frequency of their outings and this has taken
its toll on the sector. Moreover, many independent operators are present in
the category. These smaller companies do not have the financial resources to
juggle the downturn with rising operational costs and are being forced out of
business.
Overfishing and EU quotas are increasing the value of fish in general, driving
up fish and chips shop owners production costs. Sustainability has become a
key issue in the fishing industry in the UK. In his plea to save fish and chips, His
Royal Highness (HRH) the Prince of Wales is quoted in The Telegraph on
8th May 2012 as saying:
The simple fact is that fish and chip shops rely on there being
plenty more fish in the sea, and that is only going to be the case
if we take care of fish stocks now and plan for them to be there
long into the future. If their businesses are to remain viable in
the long term, fisheries management, accompanied by sound
science, really matters to them too.
Although inevitable, sustainable fishing, however, is expensive and is
hindering the sectors value.
Chicken
Key Note estimates that the chicken sector grew by 7% to 749m in the UK in
2011. This growth reflects the popularity of the product among consumers in
the UK. On 25th July 2012, the Daily Mail reported the findings of a study
commissioned by Food Network UK, which found that chicken was the nations
favourite food after bacon. Moreover, the category has increased its market
share by 0.4 percentage points since 2007, following year-on-year growth.
Overall, its value increased by 26.9% during the 5-year period.
Table 2.6: The UK Chicken Sector by Value at Current Prices
(m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Chicken 590 625 660 700 749
takeaway and
(%) 6.9 7.0 7.1 7.2 7.3
Source: Key Note
White meat is viewed as a better option compared to red meat in the UK, in
terms of both fat and potential health concerns. This phenomenon has resulted
in an influx in chicken-based products in the fast-food, takeaway and
home-delivery market, as companies offer consumers alternative meals.
Examples include McDonalds Chicken Legend and Burger Kings Flamed
Grilled Chicken Salad. Furthermore, Pizza Huts new Pizzetta lighter range
features Chicken Delight but no red meat variants. The same is true for its Posh
range.
Other Fast-Food and Takeaway Outlets
An array of restaurants are covered by the other fast-food and takeaway
outlets category. In 2011, the sector increased by 8.9% to 1.68bn. Since 2007,
the segment has increased its market share by 1.2 percentage points, more
than any other sector in the industry. Consumers progressively adventurous
palates for exotic cuisines and spicy foods is behind the success of the section
in the UK. Types of foods that are in demand include sushi, Thai, Caribbean
and Mexican meals. In addition, the rise of the breakfast occasion has also
boosted sales. An increasing number of consumers are opting to eat breakfast
on-the-go, as their hectic schedules mean that they no longer have time for
leisurely breakfasts. Although they are limiting their spending due to the
economic crisis, the demand for convenience has sustained sales in the
category. Since 2007, the value of the other fast-food and takeaway outlets
sector has risen by 29.2%. The sector now accounts for 16.3% of the total
market.
Table 2.7: The UK Other Fast-Food and Takeaway Outlets Sector
by Value at Current Prices (m at rsp and %), 2007-2011
2007 2008 2009 2010 2011
Other fast-food/
takeaway and
(%) 15.1 15.3 15.4 15.9 16.3
Source: Key Note
3. Industry Background
RECENT HISTORY
In spite of the economic crisis, the fast-food and home-delivery industry has
remained resilient in recent times. Moreover, it has actually benefitted from
the downturn, as consumers are opting for good value over quality when they
dine out. Furthermore, consumers lead increasingly hectic lifestyles and seek
to buy convenient mealtime solutions, including fast food, when they are
pressed for time or cannot be bothered to prepare and cook dinner.
In addition, companies have been responding to consumers growing health
concerns by introducing lighter versions and healthier menu options, including
salads and wraps. Still, evidence shows that, although consumers are concerned
about calories and unnutritious ingredients, these factors only affect
consumers fast-food choices in a minority of cases. Chains are also launching
premium ranges in order to boost sales and increase market value. These two
trends mark an attempt by the industry break away from the perception that
fast food is unhealthy and that products are made using poor quality
ingredients.
In spite of the industrys overall success, small and independent operators are
struggling to cope with the economic downturn. Fewer customers, fierce
market competition and rising production and operational costs are forcing
these companies out of business. The size of these enterprises means that they
are unable to keep up with large businesses that dominate the market and
which have the necessary resources to weather the storm by enhancing their
presence in the UK, by offering consumers appealing deals and by engaging
in marketing activity to promote their brands and products. As a result, the
industrys top companies Greggs, Subway, McDonalds, Kentucky Fried
Chicken (KFC), Pizza Hut, Dominos Pizza and Burger King are increasing
their presence at the expense of smaller businesses in the market.
NUMBER OF COMPANIES
In 2011, there were 61,365 companies engaged as restaurants and takeaways
in the UK. This figure was down by 1% compared with 2010, reflecting tough
market conditions, as a result of the economic crisis and fierce competition
within the industry. The majority of restaurants and takeaways earn between
50,000 and 500,000 a year. The number of businesses with a turnover of
50,000 or less declined by 13.5% in 2011. This reflects the fact that smaller
restaurants and takeaways are finding it difficult to survive the economic crisis.
Still, the number of companies earning 1m or more increased by 2.1% over
the course of the year. This figure reveals the buoyancy of the industry and
reinforces the fact that companies are actually benefitting from the crisis.
Fast-Food & Home-Delivery Outlets Industry Background
Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises
Engaged as Restaurants, Cafs and Takeaways by Turnover
Sizeband (000, number and %), 2010 and 2011
2010 2011 % of 2011 Total
Turnover Sizeband (000)
0-49 3,185 2,755 4.5
50-99 19,650 19,250 31.4
100-249 25,480 25,750 42.0
250-499 8,165 8,150 13.3
500-999 3,350 3,275 5.3
1,000-4,999 1,830 1,865 3.0
5,000+ 310 320 0.5
Total 61,970 61,365 100.0
Note: figures include licensed and unlicensed restaurants plus fast-food and takeaway
outlets.
Source: UK Business: Activity, Size and Location 2010 and 2011, National Statistics
website Crown copyright material is reproduced with the permission of the
Controller of HMSO (and the Queens Printer for Scotland)
EMPLOYMENT
The number of workers employed in the restaurant industry in the UK has
fallen by 5.8% between 2007 and 2011. The figure grew until 2009, when it
stalled and began to decline. In 2011, it fell by 6.2%, more than any other year
during the time period. In total, 604,000 employees worked in the restaurant
industry in 2011.
Table 3.2: Number of Employees in the Restaurant Industry
in Great Britain (000), 2007-2011
2007 2008 2009 2010 2011
Employees 641 660 662 644 604
% change
year-on-year - 3.0 0.3 -2.7 -6.2
Source: Employee Jobs by Industry, July 2012, National Statistics website Crown
copyright material is reproduced with the permission of the Controller of HMSO
(and the Queens Printer for Scotland)
Key Note estimates that roughly one third of these workers were hired by
fast-food companies. Based on their latest financial statements, the biggest
employers in the industry are McDonalds (39,296), Greggs (19,504) and Pizza
Hut (16,247). However, it is important to note that the workers covered by
these figures are solely the ones hired directly by the companies and excludes
those who work under franchises.
Table 3.3 shows that the majority of enterprises engaged as restaurants and
takeaways employ 4 workers or fewer (59%). Few companies employ 50
workers or more. This reflects the fact that businesses can boost profit by
keeping operational costs, including labour forces, low. Moreover, the number
of companies that employ 4 workers or fewer declined by 3.3% during the
course of the year. This supports the fact that smaller enterprises are struggling
within the market. The employee sizebands that recorded the highest rise in
the number of restaurants and takeaways in 2011 were those which employed
50 to 99 workers (9.2%), 250 or more workers (6.7%) and those which
employed 5 to 9 workers (4%).
Engaged as Restaurants, Cafs and Takeaways by Employment
Sizeband (number and %), 2010 and 2011
2010 2011 % of 2011 Total
Number of Employees
0-4 37,415 36,180 59.0
5-9 15,315 15,925 26.0
10-19 5,955 5,970 9.7
Table continues...
Engaged as Restaurants, Cafs and Takeaways by Employment
Sizeband (number and %), 2010 and 2011
...table continued
2010 2011 % of 2011 Total
20-49 2,405 2,375 3.9
50-99 490 535 0.9
100-249 240 220 0.4
250+ 150 160 0.3
Total 61,970 61,365
100.0
does not sum due to rounding
outlets.
Source: UK Business: Activity, Size and Location 2010 and 2011, National Statistics
website Crown copyright material is reproduced with the permission of the
Controller of HMSO (and the Queens Printer for Scotland)
REGIONAL VARIATIONS IN THE MARKETPLACE
There are more restaurants and takeaways in London than any other region in
the UK, with the region accounting for 18.3% of such companies in 2011, the
equivalent of 11,205 firms. This reflects the fact that more people live in the
metropolis than elsewhere in the UK. After London, there are more businesses
in the South East (13.3%), followed by the North West (9.6%). In 2011, the
regions with the fewest restaurants and takeaways were Northern Ireland and
the North East, with these regions accounting for 3.4% and 3.5% of all
enterprises involved in the industry in the UK, respectively.
Engaged as Restaurants, Cafs and Takeaways by Government
Office Region (number and %), 2011
2011 % of Total
Government Office Region
North East 2,120 3.5
North West 5,900 9.6
Yorkshire and Humberside 4,445 7.2
East Midlands 3,585 5.8
West Midlands 4,500 7.3
East 5,380 8.8
Greater London 11,205 18.3
South East 8,175 13.3
South West 5,595 9.1
Wales 2,880 4.7
Scotland 5,490 8.9
Northern Ireland 2,090 3.4
Total 61,365
100.0
does not sum due to rounding at source
outlets.
Source: UK Business: Activity, Size and Location 2011, National Statistics website
Crown copyright material is reproduced with the permission of the Controller
of HMSO (and the Queens Printer for Scotland)
Table 3.5 shows that the majority of adult consumers in the UK ate fast food
or takeaways in the 12 months ending March 2012. However, consumers in all
regions are more likely to have eaten take-away foods than having eaten in a
fast-food restaurant during the time period. The difference between the two
categories is 24 percentage points. Those living in Greater London are more
likely to have purchased food in these outlets than other residents in the UK
(80.1% and 60.4%, respectively), followed by those in East Anglia (79.4% and
59.2%). Consumers who live in the North West are the least likely to have eaten
takeaway and fast foods in the year to March 2012 (76.8% and 53.7%,
respectively). Those in the West Midlands were the least likely to have eaten
fast food in a restaurant during the same time period (49%).
Table 3.5: Adults Who Have Eaten Takeaway Foods and Adults
Who Have Eaten Fast Foods in Outlets in the Last 12 Months
by Region (% of adults), 2012
Takeaway Foods Fast Foods (Eat-In)
All adults 77.9 53.9
Scotland 77.4 54.1
North West 76.8 53.7
North 77.5 52.9
Yorkshire Humberside 77.6 49.8
East Midlands 78.7 54.0
East Anglia 79.4 59.2
South East 78.5 56.1
Greater London 80.1 60.4
South West 77.1 49.8
Wales 74.2 49.2
West Midlands 77.2 49.0
Source: Target Group Index (TGI) Kantar Media, Quarter 3 (April 2011-March
2012) 2012
DISTRIBUTION
There are more sandwich shops than any other type of fast-food and takeaway
outlet in the UK. Moreover, in 2011, Greggs overtook Subway in terms of
venues. It now owns 1,600 bakeries across the UK, 200 more premises than its
competitor. Burger King trails behind McDonalds when it comes to restaurant
count in the UK. There are more than twice as many McDonalds outlets than
those of Burger Kings.
Although the company has struggled in recent times, there are still more Pizza
Huts than any other pizza restaurant in the UK. Still, Dominos Pizza narrowed
the gap between the companies over the course of 2011 and is likely to surpass
its rival in 2012. The number of Pizza Perfect venues has declined by 37.5%
during the equivalent period, further demonstrating the difficulties being
experienced by smaller companies in the industry in the UK. With Subway, it is
the only major chain to have declined in terms of the number of venues in 2011.
Table 3.6: Selected UK Fast-Food and Takeaway Chains
by Sector and Estimated Number of Outlets, 2011
Number of Outlets
Sandwiches
Greggs 1,600
Subway
1,400
Burgers
McDonalds 1,200
Burger King 500
Pizza
Pizza Hut 700
Dominos Pizza 690
Papa Johns 120
Perfect Pizza 80
Chicken
KFC
800
includes the Republic of Ireland
KFC Kentucky Fried Chicken
Source: Key Note
HOW ROBUST IS THE MARKET?
The majority of restaurants and takeaways are well-established in the UK. Not
only are chains recognised nationwide, but Table 3.7 shows that the majority
of companies are 4 years old or more (64.3%), resulting in strong foundations
in the industry. Restaurants and takeaways presently account for 2.9% of all
businesses in the UK.
Engaged as Restaurants and Takeaways by Age of Business
(number and %), 2011
Number of
Outlets % of Total
% of All
Industries
Less than 2 years 11,585 18.9 3.8
2 to 3 years 10,300 16.8 3.8
4 to 9 years 21,190 34.5 3.7
10 or more years 18,290 29.8 2.0
Total 61,365 100.0 2.9
outlets.
Source: UK Business: Activity, Size and Location 2011, National Statistics website
Crown copyright material is reproduced with the permission of the Controller
of HMSO (and the Queens Printer for Scotland)
The fast-food and home deliveries market is robust. In spite of health concerns
associated with the industry, demand and sales remain strong. The industry has
continued to grow in spite of the economic crisis, demonstrating its strong
roots and resilience. Moreover, in spite of the downturn, entrepreneurs have
continued to invest in the market, as this type of business accounts for a larger
percentage of all enterprises that are 3 years old and under in the UK than the
industrys overall average in the economy. This means that companies have
recently opened restaurants and takeaways, demonstrating their faith in the
industry for now and in the future.
LEGISLATION
Companies in the fast-food and home-delivery industry must abide by a
number of laws in the UK that regulate different issues, including health and
safety, product quality and employment laws. The primary document is the
Food Safety Act 1990, which holds companies responsible if their products are
injurious to consumers health. It additionally states that it is illegal to
inaccurately describe or present food that misleads consumers in terms of the
nature, substance and quality of food.
In 2012, the Government amended the Food Hygiene Regulations (England)
2006, with effect from 30th July 2012. The law was updated to comply with
article 9 of Regulation (EC) No. 178/2002, which lays down procedures in
matters of food safety. Other laws that apply to the industry include EU
Working Time Directive; National Minimum Wage; Immigration, Asylum and
Nationality Act 2006; and Waste Controls (England and Wales) Regulation
2009. These aim to protect both customers and employees by detailing specific
requirements and holding companies accountable, as well as providing a
framework for businesses to follow.
KEY TRADE ASSOCIATIONS
British Hospitality Association
The British Hospitality Association (BHA) is the leading representative
organisation in the hospitality industry in the UK. Members include fast-food
and home-delivery companies, as well as hotels, foodservice providers and
other types of restaurants. The Association acts on behalf of the industry and
deals with the Government, as well as other associations and organisations. In
2010, the BHA identified five key issues at its core: economy, employment,
intelligent regulation, sustainability and health.
Hotels, Restaurants and Cafs in Europe
Hotels, Restaurants and Cafs in Europe (HOTREC) is an umbrella association
that unites national trade associations in the hospitality industry within the EU.
HOTREC speaks and acts on behalf of the overall business vis--vis the EU
institutions. It is registered under Belgian law as a non-profit organisation.
According to its website, its primary objectives are: the promotion and defence
of the interests of the hospitality industry towards the EU institutions and the
enhancement of the cooperation between the national hospitality
associations. Its main task is to monitor and analyse the effect of policy
development, at EU level, on the hospitality industry within the community.
The Pizza, Pasta and Italian Food Association
The Pizza, Pasta and Italian Food Association (PAPA) is the only formal trade
body that represents the general pizza, pasta and Italian food and drink
industry in the UK. It undertakes various commercial activities on behalf of its
members under the name J&M Group Ltd. This company is solely liable for the
management and financial administration of the business. In addition, PAPA
offers its members specialist advice based on their particular problems and
organises support activities to boost their businesses. Finally, it keeps members
informed about changes in legislation and other issues that could potentially
affect the industry.
4. Competitor Analysis
THE MARKETPLACE
The fast-foods and home-delivery industry is highly competitive. It is
dominated by chains, although independent operators do exist. The latter have
struggled in recent times as a result of the economic crisis, rising commodity
prices and pressure from other companies in the market. Still, overall, the
industry has remained resilient as restaurants offer good value for
cash-strapped consumers.
The market can be separated into three principle categories:
multinational brand and outlet operators, e.g. Burger King, Kentucky Fried
Chicken (KFC) and Pizza Hut
national brand and outlet operators, such as Greggs
small local brands or unbranded operators, including fish and chips shops.
Subway is the biggest fast-food and home-delivery franchise in the UK,
followed by McDonalds. It operates roughly 1,400 outlets across the country.
Most chains in the fast-food and home-delivery industry operate using the
franchise system.
MARKET LEADERS
Burger King (UK) Ltd
Company Structure
Burger King Ltd is the UK subsidiary of the global fast-food chain Burger King
Worldwide. The US enterprise was founded in 1953 under the name
Insta-Burger King. In 2010, the Burger King franchise was purchased for
$3.26bn (2.1bn) by 3G Capital, a private-equity firm backed by three of Brazils
leading businessmen. In June 2012, the company merged with Justice Holdings
Ltd, a London investment firm, in order to create a single Delaware-based
holding company following a deal made that April. The business is trading on
the New York Stock Exchange (NYSE) under the name Burger King Worldwide.
The fast-food chain is most famous for its Whopper burger.
Overall, Burger King has approximately 12,700 restaurants dispersed across 73
countries. The majority of these are privately owned and operate under
company licences through franchise agreements. The first Burger King in the
UK was opened in Coventry Street, London, in 1977. With over 500 outlets, it
is the UKs second-largest burger brand after McDonalds.
Fast-Food & Home-Delivery Outlets Competitor Analysis
Current and Future Developments
In March 2012, the fast-food chain debuted Lamb Flatbread burgers in the UK,
for a limited time only, to coincide with Easter. The burgers were served on a
rosemary flatbread and topped with spices, salad, chilli ketchup and mint
yoghurt sauce. The launch was supported by a marketing campaign with the
slogan Hungry like the wolf?. In its press release, Burger King Ltds Marketing
Director UK, Jo Blundell, commented:
The launch of the Lamb Flatbread is a really exciting moment
for the Burger King Ltd brand. Not only does this prove that we
are continuously leading the way when it comes to product
innovation, it also underscores our commitment to premium
and fresh food.
In April 2012, Burger King introduced a new customer feedback tool in 489
outlets in the UK. Guest Trac was developed by customer insight agency SMG
and assesses food quality, cleanliness and speed of service. Consumers were
asked to follow the instructions printed on the back of their Burger King
receipts and fill out a web-based survey. They were given free fries and drinks
for their participation. This reflects the companys commitment to
ameliorating customer experience in an attempt to revive the fast-food chain
and increase sales.
To celebrate the Queens Diamond Jubilee, Burger King rolled out its
Coronation Chicken Royale on 1st June 2012. The product consists of a 100%
chicken breast coated and cooked in crumbs in a toasted sesame-seeded bun
and is a variation of the Burger King classic. It comes with iceberg lettuce and
is topped with a curry-style sauce. The addition is a first of a series for its
temporary British-inspired summer menu that seeks to capitalise on the UKs
major events during the season. Other additions include a fish finger sandwich,
ploughmans burger, and jelly and ice cream. The menu is called Summer is
Served.
In June, Burger King began introducing Cokes Freestyle drink dispensing
system to selected restaurants in the UK, following an endorsement in
December. The touch-screen machines allow consumers to select one of
Coca-Colas soft drink brands, such as Sprite or Fanta, and mix it with an array
of new flavours including cherry, vanilla, raspberry and peach. They were
designed in collaboration with the Italian automotive company Pininfarina and
have already proven successful in the US. Their introduction in Burger King
outlets is a trial run and will test consumer reaction to the innovation in the
UK.
Financial Results
Burger King (UK) Ltd has been struggling to cope with falling sales in recent
times. In its latest financial report, covering the year ending 30th June 2010,
the company reported a decline in sales of 17.5% to 7.1m. Since 2007, this
figure has shrunk by 26.8%. Profit dropped by 15.9% during the equivalent
period. In 2010, however, it rose by 20.9% to 491m. It is important to note
that only restaurants run directly by the company (roughly 10% of outlets) are
covered by these figures, due to the nature of Burger Kings franchising system.
On 1st August 2012, Burger King Corporation published a press release
reporting a total rise in adjusted earnings before interest, taxes, depreciation
and amortization (EBITDA) of 29% to $585m for the year ending
31st December 2011.
Dominos Pizza Group PLC
Company Structure
Dominos Pizza UK & Ireland Ltd changed its name to Dominos Pizza Group
PLC on 1st May 2012. The business consists of restaurants in the UK and the
Republic of Ireland and, since April 2011, Germanys 6 outlets. As of
25th March 2012, Dominos Pizza had 732 stores in the three countries
combined. The company is listed on the London Stock Exchange (LSE).
Dominos Pizza Group PLC is part of Dominos Pizza, Incorporated, a global
enterprise that is headquartered in Ann Arbor, Michigan, in the US. The
original Dominos Pizza was established in 1960 and is now made up of more
than 9,700 corporate and franchised restaurants in 70 countries.
The first Dominos Pizza in the UK was opened in 1985 in Luton. It has grown
to become the leading pizza home-delivery and takeaway company in the
country. Over 90% of its restaurants in the UK are franchised. Dominos Pizza
employs more than 21,000 workers in both the UK and the Republic of Ireland.
As part of its strategy to focus on quality, Dominos Pizza introduced a Gourmet
range in August 2011. The three-strong range is made with a thin crust base
and variants are topped with a sundried tomato and garlic sauce, as well as
100% mozzarella cheese. The first pizza is made using chicken breast strips,
naturally smoked bacon rashers, baby spinach and sun-blushed baby plum
tomatoes. The second consists of Ventricina salami, pepperoni and Peruvian
roquito peppers. Greek feta cheese, baby spinach and sun-blushed baby plum
tomatoes make up the third pizza. A fourth version was introduced in October
2011: Quattro Fromaggio. It combines mozzarella, Greek feta cheese, Bavarian
Blue and Gran Moravia cheeses.
October also saw the release of the Meatilicious pizza by Dominos. It is made
with pepperoni, ham, chicken breast strips, smoked bacon rashers and
Cumberland sausage. The sauce uses vine-ripened tomatoes and the cheese is
100% mozzarella. A crust which is stuffed with mozzarella cheese, garlic and
herbs was additionally introduced.
In February 2012, Dominos Pizza introduced two new products. The first is
Saucy BBQ Crust, which is made like Dominos other stuffed crusts, with
mozzarella cheese, garlic and herbs, as well as Dominos classic Texas BBQ
sauce. The second is a spicy side order: Boneless Ribs. These are also served with
a BBQ dip.
In June 2012, Dominos unrolled a Mexico pizza range in the UK. It is available
in chicken, beef and vegetarian flavours. The meat variants include chorizo,
red and green chillies, tomatoes, onions, a vine-ripened tomato sauce and
100% mozzarella cheese. Instead of chorizo, the vegetarian option comes with
sweetcorn and spinach. All three versions are topped with a drizzle of cool sour
cream. Consumers can also opt for the Mexicano Stuffed Crust, which is filled
with green and red chillies, mozzarella and garlic and herbs. In its press release
on 21st June 2012, Dominos Sales and Marketing Director Simon Wallis
commented: We wanted to inject a bit of Mexican sunshine and bring a bit of
heat to pizza lovers. He added: There is a strong trend for Mexican food at
the moment.
Financial Results
In the year ending 25th December 2011, Dominos Pizza Group PLC recorded
a turnover of 209.9m, an increase of 11.5% on the 188.1m generated in the
previous year. The companys pre-tax profit also increased, rising by 10.2% to
38.8m in 2011.
Greggs PLC
Company Structure
Greggs PLC traces its roots back to the 1930s when John Gregg began
delivering eggs and yeast on his pushbike to homes in Newcastle Upon Tyne.
The first bakery was opened in 1951. The business grew in 1970s with the
acquisition of regional bakery retailers across the UK. By 1984, the company,
which by now had 260 shops scattered throughout the country, was listed on
the LSE. Nowadays, Greggs owns almost 1,600 branches in the UK and is
continuing to expand. Products, which include sandwiches, pastries and
pasties, are baked in local bakeries. Greggs is the largest specialist retail bakery
chain and the biggest food chain in terms of number of stores in the UK. It is
classified under the takeaway outlets category.
In September 2011, the company opened its first coffee shop, Greggs Moment,
in its hometown of Newcastle. Unlike at its bakeries, consumers will be able to
decide their own sandwich fillings and can choose from a variety of breads,
including focaccias, paninis and wraps, in the caf. Other products include a
range of Gourmet Square Pies, porridge, and yoghurt and fruit. Moreover, the
concept has a darker colour scheme and a new coffee cup logo and targets the
premium market, while still offering good value. Outdoor seating and free
Wi-Fi is available in store. If the trial shop is successful, Greggs plans to open
other outlets across the UK.
In October, Greggs signed a deal with Moto Hospitality to open shops in
motorway service stations. The Grocer revealed the companys plans to open
two trial shops on the M6 near Lymm in Cheshire in December in an article on
19th October 2011. If the pilot is successful, a further 30 stores will be added
to the Moto network. These outlets will charge slightly more than Greggs
bakeries on the high street.
In July 2012, Greggs opened a new concept store: Greggs the Bakery. The pilot
site was opened in Newcastle, not far from where the original bakery was
founded in the 1951. The shop carries 75 new lines, including rustic bread
loaves, a new range of cakes, giant cupcakes, deli-style sandwiches and pizzas.
The companys Chief Executive Officer (CEO), Ken McMeikan, commented in
an article published by The Grocer on 30th June 2012: Our latest concept shop
showcases Greggs bakery credentials, and gives customers a traditional bakery
shopping experience.
In August, it was revealed that Greggs frozen retail products would only be
available in branches of the supermarket retailer Iceland, at least until April
2013. Since its launch in July 2011, the sales of Greggs at home range have
far exceeded its expectations to the companys delight, according to McMeikan
on 11th August 2012 in The Grocer. The range originally consisted of nine
products, including its famous sausage rolls. By April 2012, the company
planned to extend the collection with eight new lines, as a result of its success.
Additions include a dessert range, chicken bakes and cheese and onion pasties.
Financial Results
Greggs PLC reported a rise in sales by 5.9% to 701.1m for the financial year
ending 31st December 2011. The companys sales have risen by 11.6% since
2008. Pre-tax profit rose by 15.2% during the 52 weeks. However, like-for-like
sales fell by 2.3% in the first half of 2012 reported, The Guardian on
7th August 2012. Moreover, Greggs pre-tax profit dropped by 4.6% to 16.5m.
It blamed poor weather for the results.
Kentucky Fried Chicken (GB) Ltd
Company Structure
Kentucky Fried Chicken (GB) Ltd is part of the global fast-food chain that is
based in Louisville, Kentucky, in the US. The business dates back to 1930 when
Harland Sanders began selling fried chicken from his roadside restaurant in
Corbin, Kentucky. Although the company was sold to investors in 1964, Sanders
continues to represent the brand and is referred to the as The Colonel. In 1971,
KFC was sold to Heublein, a US producer and distributor of food and alcoholic
beverages, which was, in turn, acquired by RJ Reynolds, a tobacco company, in
1982. In 1986, KFC was purchased by PepsiCo for $850m. It continues to be
owned by the corporation, under its restaurants division, which changed its
name from Tricon Global Restaurants to Yum! Brands in 2002. As a result, the
fast-food chain is a subsidiary of one of the largest restaurant companies in the
world.
In 1952, the first KFC franchise was opened in Utah. Since then, the company
has continued to grow and expand both nationally and overseas. As of
December 2011, KFC boasted 17,000 outlets in 105 countries and territories. Its
two major markets are the US and the Peoples Republic of China (PRC). The
first overseas franchise was set up in England in 1964. KFC was the first US
fast-food chain to reach the countrys shores. There are now more than 800
restaurants dispersed across the UK and the Republic of Ireland, employing
23,000 workers. Restaurant ownership in the UK is split 40% equity and 60%
franchised. According to a Daily Mail article on 1st October 2011, the most
popular KFC products in the UK are the mini fillet burger (with annual sales of
over 19 billion), the snack box popcorn chicken (14 million) and the boneless
meal for one (over 12 million).
In May 2012, KFC partnered up with Levi Roots in the UK to launch the Reggae
Reggae Box Meal for a limited time only. The meal consists of a fillet burger
with Reggae Reggae sauce and is accompanied by fries, a drink, a side and a
dipping sauce. The innovation was supported by a marketing campaign.
On 4th June 2012, KFC released the Colonels autobiography, which is also a
cookbook. Said to have been written in 1966 and discovered in November 2011,
the book is available for free and can be downloaded via Facebook. It is titled
Colonel Harland Sanders: The Autobiography of the Original Celebrity Chef.
The book consists of 33 never-before-seen recipes, including The Colonels
Special Omelette and Upside-Down Peach Cobblier, as well as stories of his life.
In July 2012, KFC began to offer a BA honours degree in business management,
in conjunction with De Montfort University Leicester. On 23rd July 2012, The
Guardian reported that the fast-food chain had invested 600,000 to fund half
of the 3-year degree for 60 restaurant managers over the next 5 years. Students
will continue to work full time for the company when they commence classes
in January 2013. In the article, Martin Shuker, Managing Director of KFC UK &
Ireland, commented:
KFC degrees give us an opportunity to reward some of our best
performers, who never had the chance to go to university when
they were younger. Our employees gain a meaningful and
respected qualification while still earning money, and we reap
the benefits of their improved skills and confidence in the
business.
The company has already set up two levels of apprenticeships with City &
Guilds.
Financial Results
Kentucky Fried Chicken (GB) Ltd registered a rise in sales by 3.1% to 371.2m
for the 52 weeks ending 28th November 2010. However, its pre-tax profit fell
by 8.6% to 38.4m. In 2011, Yum! Brands reported a rise in sales by 11% to
$10.89bn (approximately 6.94bn). Its net income increased by 14% to $1.32bn
(roughly 841.3m).
McDonalds Restaurants Ltd
Company Structure
McDonalds Restaurants Ltd is the British subsidiary of the McDonalds
Corporation. The US fast-food chain specialises in hamburgers. The company
was founded in 1940 by Richard and Maurice McDonald as a barbecue
restaurant in San Bernardino, California. The business was reorganised using
the production line principles in 1948, under the Speedee Service System, as
was already being done by the White Castle hamburger chain. Ronald
McDonald was trademarked in the US in1967, while the current double-arched
M symbol logo was trademarked the following year.
McDonalds now operates over 31,000 restaurants worldwide, employing 1.5
million workers across the globe. Roughly 15% of restaurants are owned by
the corporation itself. The remaining outlets are operated by franchisees and
via joint ventures with affiliates. In the UK, approximately 65% of the 1,200
McDonalds are franchises. The company employs 87,500 workers at the
national level.
In September 2011, McDonalds disclosed plans to provide calorie information
on its menu boards, as part of the Governments Public Health Responsibility
Deal, with effect from 7th September 2011. The decision follows a pilot in 125
restaurants, customer interviews and the use of eye-tracking technology to
observe how consumers absorb menu information when choosing food and
placing an order. On the meal boards, calorie boxes are now featured next to
products names, alongside their picture, to help consumers make a clear and
conscious choice when selecting their food.
On 26th January 2012, Popsop reported that McDonalds had unveiled a new
concept restaurant design in the UK with a focus on children. Milton Keynes
has been chosen as the trial site. If successful, the new visual approach, which
includes the latest technology facilities, will be rolled out across in all
McDonalds venues in the country. In addition to the chains usual childrens
eating area and menu, iPads, digitally projected games, childrens play areas
and mini climbing walls will be introduced. The articled quoted a spokesperson
for the company, who said:
this restaurant is only a pilot. It represents the evolution of
the eating-out experience for the family, which is very
important to us as we are a very family-oriented organization.
McDonalds announced a partnership with the book publisher HarperCollins,
also in January, to hand out Mudpuddle Farm books by Michael Morpurgo as
part of its Happy Meals for children. The companies agreed to give away
around 9 million books, which were accompanied by finger puppets to help
parents animate the story. The promotion aimed to encourage parents to read
to their children. The books were available between 11th January and
7th February 2012.
In May 2012, the company launched a new fizzy drink for kids. Fruitizz contains
one portion of fruit, no added sugars and is free from artificial colours or
flavours. It blends fruit juice concentrates from grapes, apples and raspberries
with natural sparkling water. McDonalds hopes to increase its health
credentials by portraying the drink as a healthier, more nutritious solution than
other fizzy drinks, such as Coca-Cola.
McDonalds was the official restaurant of the London 2012 Olympic and
Paralympic Games. In addition to sponsoring the event, the fast-food chain
built the largest restaurant ever, though it was only available for 6 weeks. It
was one of four McDonalds at the Olympic Park. The venue had the capacity
to seat up to 1,500 customers as reported The Guardian on 25th June 2012.
Only two venues were for public use, the others were located in the Athletes
Village and in the Media Centre, respectively. Once the Games were over, the
sustainable buildings took approximately 4 weeks to dismantle. Parts of the
restaurants, including highchairs, air conditioning units and bulbs, will be
reused by other McDonalds in the UK; while other items, including those made
from plastic, will be recycled. Roughly 75% of the outlets will be either reused
or recycled. The company plans to remain a top-level Olympic sponsor until at
least the 2020 Summer Games.
Financial Results
For the financial year ending 31st December 2010, McDonalds Restaurants Ltd
reported a rise in sales by 4.8% to 1.18bn. Its pre-tax profit increased by 37.9%
to 157.2m. According to The Telegraph on 24th January 2012, the overall
corporation hit a record turnover in 2011 of $24bn (17.19bn). This marks the
ninth consecutive year that sales have increased for the company.
Pizza Hut (UK) Ltd
Company Structure
Pizza Hut (UK) Ltd is part of Pizza Hut Inc, a US restaurant chain that also offers
takeaway and delivery services. The company is a subsidiary of Yum! Brands
Inc, the restaurant division of PepsiCo Inc. The first Pizza Hut was opened
in1958 in Wichita, Kansas, by Frank and Dan Carney. In 1977, it was acquired
by PepsiCo. 15 years after it first opened, the company went international with
restaurants in Japan and Canada, as well as in Islington, London. There are
nearly 700 venues in the UK. Roughly 22% are franchises. In total, Pizza Hut
owns over 13,000 restaurants in 97 countries worldwide. Approximately 15%
are company-operated. The company is now headquartered in Plano, Texas.
Pizza Hut has struggled in the UK in recent times. The companys Marketing
Director of Brand Development, Jaclyn Schnau, admitted this in a Marketing
Week article on 19th August 2011. She commented:
We havent kept up with the times. We put the blinders on and
said customers will still come and you know what, they didnt.
We had some real soul searching to do and fundamentally
weve realised that we have to move from a product-based to
an experience-based offer.
As a result, in August 2011, Pizza Hut announced that it would be overhauling
its business in the UK, trialling a number of initiatives, including four Alpha
Hut concept stores. These are inspired by upmarket Argentinean restaurants,
where waiters bring trays to customers tables, instead of having to get up and
go to the buffet themselves in order to collect food. If the trial is successful,
the company will roll out the concept nationwide at some point this year.
Pizza Hut first began stuffing its crust in 1995. In April 2012, the Hot Dog Crust
was introduced for a limited time only. It came with a free mustard drizzle and
was only available for its largest pizza size. In June, the company brought out
the Crown Crust pizza in the UK to celebrate the Queens Diamond Jubilee.
This crust is stuffed with burgers. Its famous Stuffed Crust is now available for
smaller 11-inch pizzas, in addition to the original 14-inch format.
The company now offers consumers unlimited access to its salad bar and has
recently unveiled a new menu. The former responds to consumers growing
health awareness, while the latter aims to improve the quality credentials of
the pizza restaurant chain, as well as tapping into the trend for healthier
products. The Pizzetta range is a lighter option (under 500 calories) that it is
served with rocket and tomatoes. Variants include Shrimply Delicious, which is
made with king prawns, fresh spinach, mozzarella cheese and mixed peppers,
and Virtuous Veg, which combines fresh spinach, mixed peppers, red onion,
mushrooms and cherry tomatoes. Pizza Hut has additionally developed a Posh
range. Pizzas include Creamy Blue, which is made using blue cheese, mozzarella
and sliced mushrooms on a Bchamel base and with a sweet balsamic drizzle.
Other products added to its menu include Salmon Pasta Bake, Classic Lasagne,
two new pizzas the BBQ Meat Feast and Country Classic starters and a
dessert. Calorie information is provided alongside the menu.
Financial Results
Sales for Pizza Hut (UK) Ltd fell by 4.4% for the 53-week period ending
4th December 2011 to 331m. This figure has fluctuated in recent times. The
company has reported a pre-tax loss throughout the period. In 2011, it
deteriorated further to a loss of 24.2m.
Select Service Partner UK Ltd
Company Structure
Select Service Partner UK Ltd (SSP Ltd) owns, operates and franchises food,
beverage and other concessions at airports and railway stations. It operates in
over 30 countries worldwide. Its brands in the UK include Caff Ritazza, Upper
Crust and Camden Food Company. Brands that are licensed to the company
include Starbucks, Costa Coffee and Ben & Jerrys. The company has been
owned by EQT IV, a European private-equity group, since 2006.
In February 2012, it was revealed that London City Airport had opened a new
customer experience initiative in conjunction with SSP, its catering partner, and
The Food Travel Experts. Customers can now partake in weekly wine tasting
sessions, every Wednesday, with wine sommeliers who can offer advice, as well
as knowledge on bottles origins and consistency. A dedicated website has
additionally been created, enabling passengers to order the wines they tasted
at the Airport, which are then delivered to their homes.
On 27th July 2012, it was announced that SSP would run an additional seven
Starbucks coffee shops across the UK in different airports. Three will be opened
at Heathrow, two at Glasgow Airport, one at Belfast International and one in
Manchester. The new stores are expected to add a total of 10m to SSPs sales
annually.
Financial Results
For its financial year ending 30th September 2011, SSP Group, to which SSP Ltd
belongs, reported a rise in sales by 5.7% to 1.72bn.
Subway Realty Ltd
Company Structure
Subway Realty Ltd is the UK branch of the US sandwich and salad franchise,
Subway. Subway is the trading name under which Doctors Associates Inc,
which is owned by Subways founders Fred DeLuca and Peter Buck, operates.
The business dates back to 1965 in Bridgeport, Connecticut. In March 2011,
Subway overtook McDonalds as the worlds biggest restaurant chain, with
33,749 outlets in 95 countries. After opening three outlets, Subway began to
operate its first franchise in 1974. The first Subway in the UK was established
in Brighton in 1996. The chain operates over 1,400 outlets in the UK and the
Republic of Ireland. The UK is Subways largest market after the US.
In January 2012, John DeLuca announced the companys ambition to create
600 new Subway outlets in the UK and the Republic of Ireland by 2015. If
successful, there will be 2,000 restaurants dispersed across both countries.
In July 2012, it was revealed that Subway was in talks with Parrs Wood High
School to open a concession at its Sixth Form College in Didsbury, Greater
Manchester, where 370 students study. On 17th July 2012, The Telegraph
quoted the schools head teacher, Andy Shakos, who said: At the moment we
are at an early stage... Subway is one of the possibilities we are looking at.
Subway has plans to treble its number of stores in the UK in the future. It hopes
to achieve this by establishing shops in non-conventional places. This includes
cinemas, hotels, convenience stores and railway stations. The flexibility of its
business format and the minimal amount of space Subway requires to open an
outlet gives the company the ability to achieve this ambition.
Financial Results
For the year ending 31st December 2011, sales for Subway Realty Ltd increased
by 1.3% to 26.6m. Similarly, pre-tax profit rose by 3.5% to 1.5m.
Other Companies
Gondola Group Ltd
The Gondola Group consists of Zizzi, ASK, Pizza Express, Kettners and Byron,
which are all casual dining restaurant chains in the UK. With over 650 venues,
the company employs roughly 15,000 workers domestically. In 2011, sales for
the combined business rose by 4.5% to 569.5m.
Papa Johns GB Ltd
Papa Johns GB Ltd is a subsidiary of the US third-largest takeaway and delivery
pizza restaurant. Its slogan is Better Ingredients. Better Pizza. There are over
120 Papa Johns on the high street in the UK. In July 2011, the company
revealed plans to increase the figure to 500 over the following 4 years.
Perfect Pizza Ltd
Perfect Pizza Ltd is a British company that was founded 30 years ago. In 2006,
Smartfirst Ltd purchased the company from Papa Johns UK. Smartfirst had
been newly formed by Papa Johns UK former MD, Tony Sherriff. The sale was
backed by Octopus Asset Management and the Royal Bank of Scotland (RBS)
PLC. The enterprise specialises in online pizza delivery and takeaway services.
The business consists of more than 80 stores nationwide. It operates using a
franchise system.
Spudulike Group Ltd
Spudulike is a fast-food franchise that was established in Edinburgh in 1974. It
started off as a takeaway but has grown to include in-store seating. As its name
indicates, its products are baked potatoes with various fillings, including
chicken tikka, chilli con carne and prawn cocktail. The company is owned by
the British School of Motoring (BSM).
Wagamama Ltd
Wagamama is a restaurant chain that offers takeaway services, specialising in
pan-fried Asian food. The first venue was opened in 1992. It is owned by
management and venture capital investors Duke Street Capital and Hutton
Collins. It operates under a franchise system.
OUTSIDE SUPPLIERS
Fast-food and home-delivery businesses rely on a network of outside suppliers
to function properly. Poultry, meat, bakery and fruit and vegetables suppliers;
equipment and packaging suppliers; logistics and transport companies;
marketing agencies; and decorators and designers all play a critical role in the
industry. Efficiency is key throughout the process in order to be effective and
guarantee the consumption of quality food and drinks by customers.
Due to pressures from the public, media and organisations, chains in the
industry are increasingly supplying their foods both ethically and domestically.
In April 2012, Burger King became the first major fast-food chain to pledge
that its eggs and pork would come from cage-free animals by 2017. In June
2011, KFC upped its environmental and animal welfare credentials by
becoming the first fast-food chain in the UK to gain Red Tractor certification
for its on-the-bone chicken. Moreover, the logo guarantees that the poultry is
sourced in the UK. McDonalds also agreed to buy more than 30,000 tonnes of
chicken from British farmers for its four venues at the Olympic Park during the
Games, following a campaign by the National Farmers Union (NFU) and animal
rights charities. This reflects growing consumer awareness and demand for
ethically and locally sourced products that support farmers and the economy.
MARKETING ACTIVITY
Burgers are the most advertised product by major companies in the fast-food
and home-delivery industry. In the year ending March 2012, burger
advertisements accounted for over half (52.3%) of all main media expenditure.
This percentage has increased compared with 2008, when burgers accounted
for 45.3% of marketing spending. Moreover, advertising expenditure on
burgers has more than doubled over the past 5 years. This is more than any
other category in the industry.
Table 4.1: Main Media Advertising Expenditure by Fast-Food
Chains (000), Years Ending March 2008-2012
2008 2009 2010 2011 2012
Burgers 39,131 44,395 52,479 58,363 60,693
Chicken 22,128 21,937 23,368 29,138 31,952
Pizza 16,337 11,330 12,000 16,431 11,722
Table continues...
Table 4.1: Main Media Advertising Expenditure by Fast-Food
Chains (000), Years Ending March 2008-2012
...table continued
2008 2009 2010 2011 2012
Sandwiches 8,597 8,231 5,569 7,967 11,040
Total 86,193 85,893 93,416 111,899 115,407
% change
year-on-year - -0.3 8.8 19.8 3.1
Source: Nielsen
Main media advertising spending on chicken has increased year-on-year.
Between 2008 and 2012, the rate rose by 44.4% to 32m. Overall, main media
advertising expenditure on sandwiches augmented by 28.4% to 11m.
However, in 2010, spending declined by 32.3%. The only category whose main
media advertising expenditure was lower in 2012 than in 2008 was pizza. It
fluctuated over the years and dropped by 28.7% in the year to March 2012.
Still, overall, main media advertising expenditure rose by 3.1% during the
12-month period to 115.4m. Since 2008, it has increased by more than one
third (33.9%).
Figure 4.1, below, illustrates the share of main media advertising expenditure
of fast-food chains according to sector.
Figure 4.1: Main Media Advertising Expenditure by Fast-Food
Chains (000), Year Ending March 2012
Sandwiches
9.6%
Pizza 10.2%
Chicken 27.7%
Burgers 52.6%
Source: Nielsen/Key Note
5. Brand Strategy
INTRODUCTION
This chapter assesses the brand strategy of the top fast-food brands in the UK.
Each company has developed its own strategy to drive sales and boost profit.
This enables them to stand apart from their competitors. Still, certain trends
are evident across the market. Fast-food and home-delivery chains have been
keen to emphasise quality, are producing healthier menus and are using social
media and technology to promote brand and product awareness, as well as to
combat the negative image associated with these type of restaurants.
COMPANIES BRANDS
Burger King
In August 2011, Burger King hired Flavia Faugeres as Chief Marketing Officer
(CMO); Leo Leon as Vice President of Marketing Innovation; and Andreas Barth
as Senior Vice President of Global Brand Management, as part of its plan to
re-launch its brand following a slump in sales. In the US, the company ditched
its king mascot to freshen up its image. Burger Kings new focus is improving
the speed of service and ameliorating the quality of its food, both in terms of
ingredients and healthier menus for consumers. It hopes that its latest brand
strategy will improve its customer loyalty in the war against its major rival
McDonalds. Jos Cil, Europe, Middle East and Africa (EMEA) President for
Burger King Corp, commented in a Marketing Week article on 18th April 2012
that improving the customer experience in each and every restaurant is a key
aim for the business. The company is asking customers for feedback through
an online survey using the Guest TracSM insight scheme to determine what
steps to take for the next stages of its brand strategy.
Four key themes make up Burger Kings latest brand strategy: menu,
operations, renovations and marketing, according to a Business Insider article
on 10th August 2012. Following a 9-month self-assessment, the company has
pinpointed these areas as its focus. It plans to increase the appeal of its menu
to a broader consumer base by introducing healthier options, including
smoothies, salads and wraps. It will set up liaisons and committees to get its
franchises to work more closely together as a uniform business. Restaurants
will receive a makeover. Renovations include digital menu boards, new
uniforms and new packaging. Finally, the company is hiring celebrities to be
the face of the brand, including David Beckham in the UK and Mary J Blige in
the US.
Fast-Food & Home-Delivery Outlets Brand Strategy
Dominos Pizza
The promotional strategy of Dominos Pizza is centred around digital
marketing. The company is at the forefront of technological revolution in the
industry and has been using social media platforms and smartphone
applications (apps) to increase sales, including iPad, iPhone and Android app,
as well as a mobile-optimised website. This strategy is proving successful. On
28th March 2012, Caterer Search reported that the companys mobile sales had
passed 1m in a single week for the first time. Moreover, e-commerce
purchases accounted for 50.6% of all delivered sales in the UK in the 13 weeks
to 25th March 2012, compared with 39.3% in 2011. Online sales rose by 44.5%
to 59.3m during the covered period, 16.3% of which were ordered via
Dominos mobile services.
Marketing initiatives are also a critical component of its strategy. Dominos is
using emails, Twitter and Facebook to promote brands, products and deals.
The benefits of its digital marketing strategy is that it is relatively low cost
according to the company in a Marketing Magazine article on
15th February 2012. Its main media advertising campaigns have included Its
What We Do and Get Stuffed!. It has also sponsored the ITV family
entertainment show Red or Black? and was the official eviction night partner
with Coca-Cola for the Celebrity Big Brother series on Channel Five that started
in August 2011.
New product development (NPD) to create better pizzas has also been at the
core of the companys promotional strategy. Its latest Mexican range, the
launch of Gourmet pizzas, stuffed crust innovation and limited offers all reflect
this strategy. It aims to add value by introducing original variants and makes
an attempt to break the negative unhealthy connotations associated with both
pizza and fast food, as well as to increase the quality of ingredients being used.
KFC
Following bad press, including accusations of animal cruelty and destroying
the rainforest, Kentucky Fried Chicken (KFC) has strived to increase its
credibility and social record by supporting various humanitarian and
sustainable causes. Its website includes a We Care section with links to the
following: Food, Environment, Community and People topics, which detail its
efforts and commitments. Moreover, in the News feed on its website, the
primary stories it has reported on are its charitable contributions. On
3rd October 2011, it published an article stating that, in 2011, it had entered
in a long-term partnership with Barnardos, the UKs largest charity for children
and young people. Then, on 19th December 2011, it revealed that, since 2007,
KFC has raised 1.5m in the UK alone for the UNs World Food programme.
Every year it hosts the Hike for Hunger to raise money for the cause. Finally on
20th June 2012, it announced that its initiative to charge 5 pence (p) per plastic
bags at its restaurants in Wales, which it commenced October 2011, had raised
16,000. The money was donated to local and national charities.
KFCs latest brand strategy is to capitalise on social media forums, due to the
growing number of consumers who are contacting brands through Facebook
and Twitter instead of making a phone call, according to a spokesperson for
the company, Rick Maynard, in The Drum on 21st February 2012. It commenced
the campaign with a month-long initiative that consisted of random tweets
and posts on Facebook leading to a secret KFC holding page, which allowed
fans and followers to win gift vouchers. Customer service and quality remain
important elements of its brand strategy.
McDonalds
The belief that it is important to tailor business according to the preferences
and demands of individual countries is at the heart of McDonalds global brand
strategy. It factors in which products are well-received; what price consumers
are willing to pay; which television programmes, newspapers and advertising
consumers read and view; and what restaurants are visited, as well as taking
social, economic, legal and technological aspects into consideration, when
devising its respective strategy.
In June 2011, McDonalds launched an ethical campaign called A to Z. The
initiative reflects a continuing attempt by the company, since 2007, to improve
trust in the brand in the UK following negative headlines regarding
McDonalds and its products. In May 2012, the fast-food chain unveiled a new,
social-media-friendly site that gives consumers a chance to go behind-the
scenes of the company. The public can find out information regarding
McDonalds food sourcing in the UK, environmental contributions and
charitable activities. Alastair Macrow, Vice President of Marketing at
McDonalds UK, is quoted in an article by Marketing Week on 15th May 2012
as saying:
as people engage more with brands through digital and social
media, were confident that introducing a new direct channel
for people to tell us what they think and ask us questions will
bring us closer to our customers a key aim of our overarching
business strategy.
Other key elements of McDonalds UK brand strategy are modernising its
venues and introducing healthier menu options.
Pizza Hut
Pizza Huts brand strategy is to become more in-tune with consumers changing
lifestyles. In August 2011, the company acknowledged that it had neglected
customer service in recent years and announced that it had laid out a plan to
change that. Its latest tactic includes the introduction of a customer service
programme called the handshake. It hopes that this will improve the brands
engagement with customers and give them a more intuitive service. In
addition, the company has updated its menu to reflect the times. Its new menu
responds to consumers growing concern for healthier options and premium
meals that are good value.
Subway
Subways brand strategy reflects its ambition to reach out to a broader
potential consumer base. Subways UK Head of Marketing, Manaaz Akhtar,
told PR Week on 27th January 2012:
In the past, Subway has focused on the young male office
worker and student consumer groups. But what we are looking
to do with our new marketing programmes is to broaden the
target and become more inclusive.
In order to achieve this, it has devised a brand strategy which focuses on the
chains health and value credentials. Its sponsorship of the weight-loss reality
television show, The Biggest Loser, on ITV1 in 2012 and the 3 Subway Lunch
campaign are both products of this tactic.
MAIN MEDIA ADVERTISING EXPENDITURE
With fierce competition in the industry, marketing activity is critical to
fast-food and home-delivery chains and restaurants in the UK. Companies use
advertisements to raise brand awareness, introduce new products and send
certain messages to consumers. Table 4.1 shows that major businesses upped
their spending on main media advertising by 3.1% between Q2 2011 and Q2
2012 to 115.4m.
March 2011 and March 2012
2011 2012
McDonalds
Restaurant chain 47,872 52,195
Double Taste milkshake 612 -
McDonalds total 48,484 52,195
KFC
restaurant chain 29,138 31,952

Subway
Restaurant chain - 6,798
Sandwich franchise 7,967 4,242
Subway total 7,967 11,040
Table continues...
March 2011 and March 2012
...table continued
2011 2012
Burger King restaurant chain 9,879 8,498
Dominos Pizza
Restaurant chain 6,606 6,786
Generic 383 83
Dominos Pizza total 6,989 6,869
Pizza Hut restaurant chain 8,971 4,238
Papa Johns pizza restaurant
chain 471 615
Fast-food brands total 111,899 115,407
% change year-on-year - 3.1
Kentucky Fried Chicken
Source: Nielsen
McDonalds spent the most promoting its products in the year ending Q2 2012.
Moreover, it increased its main media advertising expenditure by 7.7% to
52.2m, compared with the equivalent period the previous year. Burger King,
Dominos and Pizza Hut are the sole companies that decreased their advertising
budget between the years ending Q2 2011 and Q2 2012. Moreover, Pizza Hut
slashed its spending by more than half, following poor year-on-year financial
results.
Subway augmented its main media spending more than any other fast-food
chain over the time period, reflecting the success of the business in the UK. In
the year to Q2 2012, it increased its spending by 38.6% to 11m. Papa Johns
also upped its main media advertising expenditure, by 30.6% to 615,000. This
figure, however, is lower than any other fast-food chain in the industry, due
to the smaller nature of its business.
Below are advertising campaigns recently launched by fast-food and home
delivery brands in the UK.
In April 2012, Greggs unveiled a 1m marketing campaign to promote its
breakfast products and coffee. Taste Rescue features Gregg T Bud, a
tastebudologist. The campaign included sensory advertising boards at bus
stops in London, Manchester and Glasgow, which gave consumers a waft of
the smell of bacon roll and fresh coffee. The advertisement emphasised that
the coffee is a British blend and made with Fairtrade beans.
On 1st May 2012, McDonalds commenced a 4-week advertising campaign
to promote its Great Tastes of America products, which were each available
for 1 week only during the time period. Each advertisement features a
mother and her child strolling down the street, passing a shopkeeper. The
camera then moves on to two police officers, followed by a dressed-up dog
and an elderly lady in Chicago, New York and somewhere in Texas and
Arizona, respectively. Each commercial gives consumers a taste for the
different locations in the US based on the relevant burger that week.
In May, Subway launched its London 2012 themed advertisement. The
30-second spot featured Olympians: boxer Anthony Ogogo and pole-vaulter
Holly Bleasdale. Each state their personal best, followed by their favourite
sandwich at Subway. The advertisement stresses the nutritional value of the
products, including the calorie count, and states that they are one of the
consumers 5-a-day. Another advertisement, as part of the same campaign,
features gymnast Louis Smith and basketball player Pops Mensah Bonsu.
In May, Burger King rolled out the Mmmm advertisement to promote its
new Angus XT Burger. It features a young businessman, its target audience,
who takes a bite of the burger and finds it so delicious he mmms throughout
his whole day at the office, followed by the bus home, in the shower and still
continues after he is in bed. The advertisement stresses that the burger is
made with extra-thick 100% Aberdeen beef, steakhouse sauce and crispy
salad. The strapline is extra thick, extra tasty.
In June, KFC launched its Shes a Lady advertisement to promote its BBQ
Rancher range. It features a young woman who spends her day being
side-stepped by men, until she passes KFC in the evening with a friend. At
that moment, the voiceover comes in and says: At least someone knows how
to treat you right and introduces the range, emphasising that it is freshly
made.
In July 2012, Dominos unveiled a three-part satirical soap opera on its
Facebook page titled Los Pasiones de la Familia Verduras to promote its new
Mexican pizza range. The videos tell the story of the dramatic life of the
Verduras vegetable family in Mexico, including lovers from rival families,
family feuds and even a murder. Each episode ends with a cliff hanger and
gives viewers multiple choice answers to decide what will happen next. In
the final episode, Dominos asks consumers to actually make their own film
for the finale and gives them the opportunity to win a Nokia Lumia 800
smartphone. Dominos has created a print-out sheet, which is free to
download and enables consumers to create key characters and props.
The We All Make the Games campaign by McDonalds was released to
coincide with the London 2012 Olympic and Paralympic Games in July and
August. The advertisements aim to capture the magic of the Olympic spirit
by relaying the people, the moments and the emotions that make the event
spectacular. They promote the McDonalds brand instead of actual products
by the fast-food chain.
6. Strengths, Weaknesses, Opportunities
and Threats
STRENGTHS
Fast food is popular in the UK and the majority of the population has eaten
this type of food in the past 12 months.
Fast-food and home-delivery businesses are one of the most important
sectors in the restaurants industry in the UK.
In spite of the economic crisis, the fast-food and home-delivery industry
remains resilient.
Fast food and takeaways tend to be good value. Their low cost is appealing
to consumers whose finances are strained as a result of the economic crisis.
The industry has actually benefitted from the downturn.
Brands in the fast-food and home-delivery industry are well-established in
the UK.
Takeaways and home deliveries are in high demand as consumers stay at
home in order to save money, but do not have the time or do not want to
put in the effort required to cook from scratch.
Evidence shows that when consumers eat fast food and takeaways, most do
not count calories or take into account nutritious content.
The fast-food and home-delivery industry is in a prime position to benefit
from consumers increasingly busy schedules and the demand for convenient
mealtime solutions.
Major companies in the industry have the necessary resources to finance main
media advertising campaigns.
WEAKNESSES
Fast food is portrayed by the Government, the media and society as being
unhealthy and poor quality. Fast food is associated with junk food.
Fast food tends to be high in salt, calories and fat.
Social pressures and consumer demand for healthy foods are contradictory
to the nature of the fast-food and home-delivery industry, which has
traditionally centred around mass-produced fried foods.
Fast-food chains are being accused of poisoning consumers, being abusive
towards animals and destroying the rainforest with their packaging.
Competition in the fast-food and home-delivery industry is fierce.
Fast-Food & Home-Delivery Outlets Strengths, Weaknesses, Opportunities and Threats
The fast-food and home-delivery market is saturated with restaurants and
products.
Innovation in the industry is temporary and limited.
OPPORTUNITIES
Companies can diversify their menu portfolio by catering to consumer
demand for healthier products.
Fast-food chains can maximise value by introducing premium ranges that
offer consumers something extra.
Fast-food chains will increasingly use social media campaigns to promote
their brand and products, as well as to interact with consumers on a new
level.
Consumers will increasingly order takeaways and home deliveries online and
via smartphone applications (apps).
Contactless payments will gain prominence in the future in the fast-food
industry to save consumers even more time.
Consumers are becoming more and more adventurous when it comes to food
and are open to trying exotic cuisines and innovative flavours in the fast-food
and takeaway industry.
Fast-food and home-delivery businesses can push sales during televised
events, such as the Queens Diamond Jubilee and the Olympic and Paralympic
Games.
Fast-food chains have begun modernising their restaurants, renovating the
venues and introducing a new era of gadgets, including electronic menu
boards.
Fast-food companies can launch marketing campaigns that appeal to a
broader audience to maximise their potential consumer base.
THREATS
It is impossible for fast-food companies to offer consumers genuinely healthy
foods at a low cost.
Small and independent fast-food and takeaway businesses are struggling to
juggle market competition, the economic crisis and rising operational and
production costs.
The fish and chips subsector is threatened by overfishing and quotas.
The fast-food industry is susceptible to backlashes, as was evidenced by
McDonalds Twitter account fiasco.
Legislative demands regarding labelling could damage the fast-food and
home-delivery industry, as companies are forced to expose ingredients and
nutritional content in their foods and drinks.
Rising food and energy prices, as well as general production and operational
costs, are eating into companies profit.
Meal deals and ready meals, plus chilled and frozen foods, in supermarkets
are upping the ante by offering consumers higher quality, cheaper products
and the equivalent convenience as fast foods and takeaways.
7. Buying Behaviour
INTRODUCTION
In August 2012, Key Note commissioned NEMS Market Research to interview
adults in the UK, aged 16 years and older, for the purpose of this report. It
surveyed 1,000 adults questioning them on their opinions on fast food and
takeaways. This chapter analyses the results of this survey and its meaning for
companies in the industry.
VALUE
In the face of the economic crisis, consumers are opting to eat in fast-food
restaurants, which offer good value. This phenomenon is summarised in an
article by Fast Food Nation on 29th March 2012, which states:
As the recession starts to take effect on our bank balances, fast
food is undergoing a renaissance with offers of cheap, filling
food attracting people through the doors with the possibility
of a meal for four for under 10 being the main motivator.
Table 7.1 reveals that 54% of respondents agreed that major fast-food and
home-delivery outlets were good value for money. Women were slightly more
likely to agree with this statement than men. The difference between the two
sexes was by 2.3 percentage points. Those aged 34 and under were significantly
more likely to find fast food and takeaways good value for money than older
generations. Moreover, the vast majority of respondents aged 16 to 19 believe
that this type of restaurant is good value (89.5%).
Respondents who belong to social grade A are also more likely to find fast food
good value for money (85.1%). By contrast, those in social grade E are not as
likely to share this opinion (48.3%). Those not working for other reasons than
being retired or invalid are more likely to have responded that they agreed
with the statement that fast-food chains are good value (70.7%) than
respondents with other working statuses, even though they have no source of
income.
Larger households with more mouths to feed are more likely to believe that
fast food and takeaways are good value than smaller households. This reflects
the fact that this type of restaurant is family-friendly with deals, smaller
childrens meals and activities that target children. This is supported by the fact
that respondents living in households with no children were the least likely to
find fast food and takeaways good value for money (51.2%).
Fast-Food & Home-Delivery Outlets Buying Behaviour
(% of adults), August 2012
Statement: The major fast-food and home-delivery outlets offer good value for money.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 54.0
Sex
Male 48.8 47.7 52.8
Female 51.2 52.3 55.1
Age
16 to 19 4.5 7.4 89.5
20 to 24 10.6 13.6 68.8
25 to 34 17.5 24.4 75.1
35 to 44 18.4 16.9 49.6
45 to 54 16.3 14.8 49.2
55 to 64 13.1 9.9 40.7
65+ 19.6 13.0 35.8
Social Grade
A 1.7 2.6 85.1
B 20.0 19.4 52.4
C1 25.9 26.7 55.6
C2 26.3 26.5 54.4
D 15.9 15.6 53.0
E 10.2 9.2 48.3
Working Status
Working full-time
43.6 45.6 56.5

Part time 18.4 18.6 54.5
Not working (excluding retired/
invalid)
15.5 20.3 70.7

Not working (retired/invalid) 22.4 15.5 37.2
Region
North 4.7 4.6 53.0
Yorkshire and Humberside 10.9 11.1 54.8
East Midlands 6.1 5.7 51.0
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Region (cont.)
West Midlands 6.3 4.9 41.8
East Anglia 8.9 8.6 52.3
South East 16.2 17.4 57.9
Greater London 12.4 12.8 55.8
South West 8.5 8.9 56.4
North West 12.0 12.5 56.3
Wales 5.1 4.7 49.7
Scotland 9.1 8.9 53.0
Size of Household
One person 23.3 17.9 41.5
Two persons 30.6 27.6 48.5
Three person 16.9 18.6 59.4
Four persons 21.5 26.7 67.1
Five persons or more 7.3 8.9 66.0
Marital Status
Married/living as married 47.1 47.3 54.3
Single 34.5 41.2 64.4
Divorced 7.1 4.5 34.0
Widowed 9.5 5.8 33.2
Separated 1.5 1.1 39.5
Presence of Children
Aged 0-4 6.9 9.2 72.4
Aged 5-9 12.1 14.5 64.8
Aged 10-15 14.8 16.0 58.2
No children 74.4 70.6 51.2
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Tenure
Own home outright 41.9 37.7 48.5
Buying home 33.4 37.0 59.7
Rent from the council 9.7 8.4 46.9
Rent rent privately 11.3 13.2 62.9
Rent-free occupancy 1.2 0.9 39.8
30+ hours a week
e.g. full-time student, not looking for work, unemployed
Base: all adults aged 16+
Weighted sample: 1,000
Source: Key Note
Although consumers are increasingly choosing fast-food and takeaway outlets
over other types of restaurants when eating out, only 14.2% of respondents
agreed that they tended to eat fast food in order to save money during the
recession. Key Note argues that when consumers want to save money they are
more likely to eat at home. They dine out for other reasons or to treat
themselves. Still, when eating out consumers are increasingly choosing to visit
low-cost restaurants.
Younger age groups are more likely to eat in a fast-food restaurant in order
to save money during the recession than other age groups. While roughly half
(50.9%) of those aged 16 to 19 agreed with the statement, only 4.6% of those
65 and over also concurred. No respondents in social grade A agreed that they
tended to choose fast food in order to save money.
Without an income, those who were not working are more likely to be on a
tight budget than those employed. More respondents with this working status
agreed that they tend to eat fast food in order to save money than those who
are either employed or retired/invalid (34.1% and 6.6%, respectively). After
Tokyo, London is the second most expensive city in the world to eat in,
according to Zagat statistics. This helps to explain why Londoners are more
likely to agree that eating fast food saves money during the recession when
compared with other restaurants in the capital (29.6%).
Table 7.2: Adults Who Agreed That They Tend to Eat Fast Food
to Save Money During the Recession (% of adults), August 2012
Statement: When eating out I tend to eat fast food to save money during the recession.
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 14.2
Sex
Male 48.8 51.6 15.0
Female 51.2 48.4 13.4
Age
16 to 19 4.5 16.1 50.9
20 to 24 10.6 24.0 32.0
25 to 34 17.5 19.9 16.1
35 to 44 18.4 16.5 12.7
45 to 54 16.3 11.6 10.1
55 to 64 13.1 5.4 5.9
65+ 19.6 6.4 4.6
Social Grade
A 1.7 0.0 0.0
B 20.0 19.2 13.6
C1 25.9 25.0 13.7
C2 26.3 29.4 15.9
D 15.9 18.5 16.5
E 10.2 7.9 10.9
Working Status
Working full-time
43.6 31.7 10.3

Part time 18.4 20.7 15.9
Not working (excluding
retired/
invalid)
15.5 37.3 34.1

Not working (retired/
invalid) 22.4 10.4 6.6
Table continues...
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Region
North 4.7 6.4 19.5
Yorkshire and
Humberside 10.9 9.8 12.8
South East 16.2 12.9 11.3
South West 8.5 7.1 11.9
North West 12.0 8.5 10.1
Wales 5.1 2.0 5.7
Scotland 9.1 5.4 8.4
Size of Household
One person 23.3 17.3 10.5
Two persons 30.6 16.2 7.5
Marital Status
Married/living as
married 47.1 30.2 9.1
Single 34.5 60.7 25.0
Divorced 7.1 5.0 10.0
Widowed 9.5 3.5 5.3
Table continues...
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Aged 0-4 6.9 8.9 18.3
Aged 5-9 12.1 12.1 14.3
Aged 10-15 14.8 28.5 27.2
No children 74.4 60.6 11.5
Tenure
Buying home 33.4 41.2 17.5
30+ hours a week
Source: Key Note
CONVENIENCE
Another factor affecting consumers decision to eat fast food and takeaways
is their convenience. This type of food provides a simple and hassle-free
mealtime solution. It is prepared instantaneously, saving customers both time
and effort. Moreover, it can be eaten at the restaurant, on-the-go and at home,
making it compatible with consumers non-stop lifestyles. 39.9% of
respondents said they tended to eat fast food to save time and effort.
Men are more likely to eat fast food and takeaway due to its convenience than
women. The difference between the two sexes is 10.7 percentage points.
Respondents aged between 16 and 19 years old tend to eat fast food and
takeaways to save time and effort more than any other age group (74.6%).
Furthermore, penetration percentage declined as consumers grew older. A
similar trend is evident when respondents are organised according to social
grade. While 71.6% of respondents in social grade A said that they tend to eat
fast food and takeaways to save time and effort, only 17.6% of those in social
grade E agreed with the statement.
As the capital, London is buzzing with people with busy schedules and
fast-paced lifestyles. Consumers in the metropolis are more likely to opt for
convenient on-the-go mealtime solutions than those elsewhere in the UK
(64.2%). This is reflected in the fact that respondents that live in Greater
London are more likely to eat fast food and takeaways than those that reside
in any other region in the UK. Moreover, the difference with the nearest
region, East Anglia, is a significant 17.7 percentage points.
Not only did respondents who live in larger households agree that they were
more likely to eat this type of food since it was good value, but they
additionally agreed with the statement that these meals save time and effort
more than those in any other household size. The same is also true for
households with older children aged between 10 and 15 (58.9%).
and Takeaways to Save Time and Effort (% of adults),
August 2012
Statement: I tend to eat fast food and takeaways to save time and effort.
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 39.9
Sex
Male 48.8 55.5 45.4
Female 51.2 44.5 34.7
Age
16 to 19 4.5 8.4 74.6
20 to 24 10.6 16.2 60.7
25 to 34 17.5 22.9 52.0
35 to 44 18.4 18.7 40.6
45 to 54 16.3 15.5 38.0
55 to 64 13.1 9.7 29.6
Table continues...
August 2012
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Age (cont.)
65+ 19.6 8.6 17.6
Social Grade
A 1.7 3.0 71.6
B 20.0 22.5 44.9
C1 25.9 28.1 43.3
C2 26.3 23.7 35.9
D 15.9 18.2 45.7
E 10.2 4.5 17.6
Working Status
Working full-time
43.6 48.8 44.7

Part time 18.4 19.3 41.9
retired/
invalid)
15.5 20.5 52.7

invalid) 22.4 11.4 20.2
Region
North 4.7 4.8 41.4
Yorkshire and
South East 16.2 11.5 28.3
South West 8.5 8.8 41.1
North West 12.0 10.1 33.5
Wales 5.1 4.7 36.7
Table continues...
August 2012
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Region (cont.)
Scotland 9.1 7.9 34.8
Size of Household
One person 23.3 19.9 34.1
Two persons 30.6 19.2 25.0
Marital Status
Single 34.5 48.7 56.2
Divorced 7.1 5.3 29.6
Widowed 9.5 5.4 22.5
Aged 0-4 6.9 7.3 42.4
Aged 5-9 12.1 13.5 44.7
Aged 10-15 14.8 21.9 58.9
No children 74.4 66.9 35.9
Table continues...
August 2012
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Tenure
Buying home 33.4 42.2 50.4
30+ hours a week
Source: Key Note
NUTRITION
Consumers in the UK are increasingly concerned about calories, fat, sugar and
salt in their food. Not only are they cautious for their waistline, but they are
increasingly aware of the importance of eating healthily for physical and
mental well-being following a series of initiatives by the Government, the
media and other organisations. Although consumers are concerned about
nutrition in their daily life, when eating fast food and takeaways, a minority
actually factor in calories. When respondents were asked if they agree with the
statement: I think about calories when I order fast food and takeaways, only
29.4% of respondents agreed.
Women, who are more likely to be on a diet than men, are more likely to factor
in calories when deciding what to eat at a fast-food and takeaway restaurant
(36.2% and 22.2%, respectively). Those aged 65 and older are less likely to take
calories into consideration when ordering fast food and takeaways than any
other age group (21.1%). Key Not accredits the low penetration to the fact
that, after a certain age, some consumers tend to care less about their health
and appearance. Those aged 20 to 24 (33.5%), in social grade B (34.1%) and
those who were working part time (37%) were the most likely to agree with
the statement. Similarly, respondents living in Wales (39.3%), in households of
three people (39.5%) and respondents who were divorced (31.7%) were also
most likely to agree. Respondents living in households with the presence of
children between 5 and 9 years old (35.5%) and in rent-free occupancy (54.6%)
are more likely to factor in calories, according to the survey.
Table 7.4: Adults Who Think About Calories When They Order
Fast Food and Takeaways (% of adults), August 2012
Statement: I think about calories when I order fast food and takeaways.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 29.4
Sex
Male 48.8 36.8 22.2
Female 51.2 63.2 36.2
Age
16 to 19 4.5 4.9 32.2
20 to 24 10.6 12.1 33.5
25 to 34 17.5 19.5 32.6
35 to 44 18.4 20.8 33.3
45 to 54 16.3 18.2 32.8
55 to 64 13.1 10.4 23.3
65+ 19.6 14.1 21.1
Social Grade
A 1.7 1.1 19.2
B 20.0 23.2 34.1
C1 25.9 25.9 29.3
C2 26.3 25.3 28.3
D 15.9 17.2 31.8
E 10.2 7.3 20.9
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Working Status
Working full-time
43.6 49.1 33.1

Part time 18.4 23.1 37.0
retired/
invalid)
15.5 11.1 21.0

Region
North 4.7 5.9 37.0
South East 16.2 21.3 38.6
South West 8.5 10.2 35.0
North West 12.0 10.9 26.7
Wales 5.1 6.8 39.3
Scotland 9.1 5.9 19.2
Size of Household
One person 23.3 18.5 23.4
Two persons 30.6 27.9 26.8
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Marital Status
Single 34.5 35.2 30.0
Divorced 7.1 7.7 31.7
Widowed 9.5 8.1 25.2
Aged 0-4 6.9 7.0 30.2
Aged 5-9 12.1 14.6 35.5
Aged 10-15 14.8 12.9 25.5
No children 74.4 72.3 28.6
Tenure
Buying home 33.4 37.8 33.2
30+ hours a week
Source: Key Note
Table 7.5 shows that, in spite of companies efforts to combat the association
of fast food with poor nutrition, the stigma remains as 59.1% of respondents
agreed that they tried to avoid fast food and food from home-delivery services
because they considered them generally unhealthy. Women are more likely to
have agreed with the statement than men (62.2% and 56%, respectively). This
reflects the fact that women are more likely to pay attention to nutritional
information and be conscious of their weight than men.
With the exception of those aged 16 to 19 and those aged 25 to 34, more than
60% of respondents said they avoided fast food because they felt it is generally
unhealthy. Moreover, 83.7% of respondents in social grade A concurred with
the statement.
Those who work part time (61.2%) or were not working (retired/invalid
[61.9%]) were more likely to hold this view than those who were not working
for other reasons or who were employed full time (59.8%) or not working
(excluding retired/invalid [50.7%]). There was significant variation among
regions; while 78.1% of respondents living in the East Midlands agreed with
the statement, only 49.8% of those living in the South West held the same
opinion.
Respondents who were single or divorced were the least likely to avoid fast
food or home delivery because they considered the food generally unhealthy
than any other marital status (55.4% and 57.7%, respectively), while those in
households of five or more persons were also less likely to be deterred (49.8%).
Households with the presence of children aged 10 to 15 were less likely to
concur with the statement than other households (47.1%), as were those who
were renting from the council (46.3%).
Table 7.5: Adults Who Agreed That They Try to Avoid Fast Food
and Takeaways Because They Consider Them Unhealthy
Statement: I try to avoid fast food and food for home delivery because I consider them
generally unhealthy.
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 59.1
Sex
Male 48.8 46.2 56.0
Female 51.2 53.8 62.2
Age
16 to 19 4.5 2.5 32.3
20 to 24 10.6 11.6 64.6
25 to 34 17.5 15.0 50.7
35 to 44 18.4 19.8 63.7
45 to 54 16.3 16.9 61.3
55 to 64 13.1 13.8 62.5
65+ 19.6 20.4 61.6
Table continues...
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Social Grade
A 1.7 2.4 83.7
B 20.0 18.8 55.7
C1 25.9 28.9 65.9
C2 26.3 25.9 58.1
D 15.9 14.0 52.3
E 10.2 10.0 57.9
Working Status
Working full-time
43.6 44.1 59.8

Part time 18.4 19.0 61.2
retired/
invalid)
15.5 13.3 50.7

invalid) 22.4 23.5 61.9
Region
North 4.7 5.3 67.6
Yorkshire and
South East 16.2 16.4 59.9
South West 8.5 7.2 49.8
North West 12.0 13.0 64.0
Wales 5.1 4.7 54.9
Scotland 9.1 7.7 50.2
Table continues...
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Size of Household
One person 23.3 19.7 50.0
Two persons 30.6 32.5 62.6
Marital Status
Single 34.5 32.3 55.4
Divorced 7.1 7.0 57.7
Widowed 9.5 10.5 65.7
Aged 0-4 6.9 7.1 60.9
Aged 5-9 12.1 13.0 63.6
Aged 10-15 14.8 11.8 47.1
No children 74.4 75.9 60.4
Table continues...
...table continued
Sample Profile
(%)
Purchasing
Profile (%)
Penetration
(%)
Tenure
Buying home 33.4 32.8 57.9
30+ hours a week
Source: Key Note
In recent times, fast-food and takeaway chains have been expanding their
menu selection to include healthier products in an attempt to appeal to a
broader consumer base and to give consumers more choice and increase
frequency of visit. In spite of these attempts, 43.1% of respondents believe that
they would eat more fast food if there were more healthy options on the menu.
This means that there remains a niche in the market for healthier meals in the
fast-food and takeaway industry in the UK.
More women than men agreed that they would eat more often in fast-food
restaurants if there were healthier options on the menu (45.7% compared with
40.4%). Women tend to be more diet-conscious than men and are thus more
likely to count calories. Only 5% of respondents belonging to social grade A
agreed with the statement.
Those not working for other reasons aside from being retired or invalid said
they would eat more often in fast-food restaurants if there were more healthy
options on the menu more than any other category when respondents are
organised according to working status (57.8%). Penetration surpassed the 50%
mark solely for respondents living in the North (58.5%), the East Midlands
(56.2%) and Greater London (53.8%). Meanwhile, those who were single
(50.9%) and aged between 20 and 24 (57.6%) registered the highest
penetration.
Table 7.6: Adults Who Agreed That They Would Eat More
Fast Food If There Were More Healthy Options on the Menu
Statement: I would eat more fast food if there were more healthy options on the menu.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 43.1
Sex
Male 48.8 45.7 40.4
Female 51.2 54.3 45.7
Age
16 to 19 4.5 4.4 42.5
20 to 24 10.6 14.2 57.6
25 to 34 17.5 18.7 45.8
35 to 44 18.4 19.2 45.0
45 to 54 16.3 19.3 51.2
55 to 64 13.1 11.5 38.0
65+ 19.6 12.6 27.8
Social Grade
A 1.7 0.2 5.0
B 20.0 21.2 45.7
C1 25.9 27.3 45.4
C2 26.3 26.5 43.3
D 15.9 16.9 45.9
E 10.2 8.0 33.7
Working Status
Working full-time
43.6 43.9 43.4

Part time 18.4 19.9 46.8
retired/
invalid)
15.5 20.8 57.8

Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Region
North 4.7 6.3 58.5
South East 16.2 16.3 43.5
South West 8.5 8.4 42.5
North West 12.0 9.2 32.9
Wales 5.1 4.5 38.6
Scotland 9.1 7.6 36.2
Size of Household
One person 23.3 21.5 39.8
Two persons 30.6 28.6 40.2
Marital Status
Single 34.5 40.7 50.9
Divorced 7.1 6.2 37.1
Widowed 9.5 6.3 28.6
Aged 0-4 6.9 7.6 48.1
Aged 5-9 12.1 12.7 45.4
Aged 10-15 14.8 14.5 42.3
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Presence of Children (cont.)
No children 74.4 73.0 42.3
Tenure
Buying home 33.4 36.0 46.4
30+ hours a week
Source: Key Note
Although there is still work for fast-food and takeaway chains to do as four in
ten respondents said they would eat in this type of restaurants more often if
there were healthier options on the menu, 64.2% of respondents agreed that
they had noticed an improvement in the number of healthy options offered
by fast-food restaurants and home-delivery outlets over the past 5 years.
Women are more likely to have noticed than men. Those aged 16 to 19 were
significantly more sensitive to the influx of healthy products than other age
groups (82.8%), particularly those aged 65 and over (43.6%). Those in social
grade B were more likely to have agreed with the statement than any other
social grade. While 70.7% of those in social grade B noticed a difference in
menu offerings, only 20.3% of those in social grade A concurred that healthier
products were now more readily available than 5 years ago.
Those in East Anglia (73.8%) were more sensitive to the change in menu than
any other region, followed by residents in the South West (70.7%) and Wales
(69.7%). Single respondents were more likely to agree with the statement than
those of other marital status (71.6%), as were those with children aged 0 to 4
(76.7%) and rent-free tenants (80%) in their own respective categories.
Than 5 Years Ago (% of adults), August 2012
Statement: Fast-food restaurants and home-delivery outlets now offer healthier options
than 5 years ago.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 64.2
Sex
Male 48.8 47.8 62.9
Female 51.2 52.2 65.3
Age
16 to 19 4.5 5.8 82.8
20 to 24 10.6 12.5 75.3
25 to 34 17.5 18.4 67.2
35 to 44 18.4 21.1 73.5
45 to 54 16.3 17.3 68.3
55 to 64 13.1 11.7 57.1
65+ 19.6 13.3 43.6
Social Grade
A 1.7 0.5 20.3
B 20.0 22.0 70.7
C1 25.9 26.1 64.5
C2 26.3 26.5 64.6
D 15.9 16.1 65.2
E 10.2 8.8 54.9
Working Status
Working full-time
43.6 46.3 68.2

Part time 18.4 18.5 64.6
retired/
invalid)
15.5 18.6 77.1

invalid) 22.4 16.4 46.9
Table continues...
...table continued
than 5 years ago.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Region
North 4.7 4.7 64.7
South East 16.2 16.6 65.6
South West 8.5 9.4 70.7
North West 12.0 11.7 62.7
Wales 5.1 5.5 69.7
Scotland 9.1 8.7 61.3
Size of Household
One person 23.3 19.7 54.4
Two persons 30.6 26.8 56.2
Marital Status
Single 34.5 38.5 71.6
Divorced 7.1 6.8 61.3
Widowed 9.5 6.5 43.7
Table continues...
...table continued
than 5 years ago.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Aged 0-4 6.9 8.2 76.7
Aged 5-9 12.1 12.2 64.7
Aged 10-15 14.8 16.0 69.0
No children 74.4 71.8 61.9
Tenure
Buying home 33.4 36.4 69.9
30+ hours a week
Source: Key Note
Only half of the respondents (54.8%) believe that the food on offer in fast-food
and takeaway restaurants is better quality now than 5 years ago. This means
that the negative connotation between this type of restaurant and poor food
remains widespread in the UK. Men are more likely to hold this opinion than
women (59.9% and 50%, respectively). Not only do those aged between 16 to
19 eat in these outlets due to their good value and convenience, but nearly
nine in ten respondents (89.5%) in the age group believe that the quality of
the food has improved since 2008. By contrast, only 41.6% of those aged 65
and over are likely to share the same opinion, as are only 25.3% of those in
social grade A.
Respondents living in the North West are more likely to agree that there has
been a rise in the quality of fast food and takeaways in the UK than any other
region (62.7%), followed by the North (59.1%). Those living in Greater London
(50%) and the West Midlands (50.5%) are the least likely to have noticed an
improvement.
Table 7.8: Adults Who Consider the Food on Offer Better Quality
than 5 Years Ago (% of adults), August 2012
Statement: I consider the food on offer of better quality than 5 years ago.
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
All adults 100.0 100.0 54.8
Sex
Male 48.8 53.3 59.9
Female 51.2 46.7 50.0
Age
16 to 19 4.5 7.3 89.5
20 to 24 10.6 11.3 58.4
25 to 34 17.5 18.2 56.8
35 to 44 18.4 20.6 61.3
45 to 54 16.3 16.9 56.7
55 to 64 13.1 10.9 45.6
65+ 19.6 14.8 41.6
Social Grade
A 1.7 0.8 25.3
B 20.0 20.7 56.8
C1 25.9 26.2 55.4
C2 26.3 28.9 60.2
D 15.9 14.7 50.8
E 10.2 8.7 46.6
Working Status
Working full-time
43.6 45.3 57.0

Part time 18.4 18.3 54.4
retired/
invalid)
15.5 19.1 67.6

Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Working Status (cont.)
Region
North 4.7 5.0 59.1
South East 16.2 15.4 52.3
South West 8.5 8.6 55.3
North West 12.0 13.7 62.7
Wales 5.1 4.9 53.4
Scotland 9.1 8.8 53.3
Size of Household
One person 23.3 20.6 48.6
Two persons 30.6 28.8 51.5
Marital Status
Single 34.5 38.3 60.8
Divorced 7.1 6.1 46.7
Widowed 9.5 6.6 38.3
Table continues...
...table continued
Sample
Profile (%)
Purchasing
Profile (%)
Penetration
(%)
Aged 0-4 6.9 6.2 49.4
Aged 5-9 12.1 12.9 58.7
Aged 10-15 14.8 18.1 66.7
No children 74.4 72.0 53.0
Tenure
Buying home 33.4 35.7 58.5
30+ hours a week
Source: Key Note
8. Current Issues
TECHNOLOGY
The technological revolution is gaining momentum in the fast-food and
home-delivery industry. Chains are increasingly relying on systems and
technologies to improve customer experience in the market, as well as to
promote their own brands and products. The developments enable the contact
between companies and consumers to be speedier and more efficient, as well
as creating a newfound dynamic level of interaction.
Contactless Payments
On 19th January 2012, The Guardian reported that 2012 was set to be the year
the contactless payment revolution would begin. Virtual payment systems
require no tills, cards or pin numbers. They use wave and pay technology with
both cards and mobile phones. In spite of security fears, contactless payments
can save consumers both time and effort and are predicted as the way forward
by supporters in the banking industry. Visa predicts that by 2020 half of all
transactions over its network will be made through a mobile device, as
reported by another article by The Guardian on 21st August 2012. Contactless
payments can be made for payments worth up to 20.
Contactless payment can make the fast-food and takeaway industry even faster
by saving several seconds per transaction. Moreover, most purchases in these
restaurants are under 20. McDonalds, Greggs, Burger King and Subway have
all adopted the technology to a greater or lesser extent. This trend is set to
continue in the future.
Wi-Fi Access
More and more, fast-food chains are offering customers free wireless Internet
in their restaurants. In March 2012, Greggs announced that it would install
Wi-Fi in all of its stores. The roll-out was expected to be completed by the end
of the summer. The importance of these connections is evident by the fact that
McDonalds, which invested 300m to establish Wi-Fi networks in its
restaurants in the UK, reported that it now serves more emails a day than it
does Big Macs, said a company press release on 16th December 2011. Mark
Fabes, Director of IT at the company in the UK, is quoted saying: Demand for
Wi-Fi in our restaurants is growing at an incredible pace. Giving customers free
Wi-Fi access is part of the companys refurbishment plans, which are expected
to be completed by the end of 2012. These instalments reflect the growing
importance of smartphones and the Internet as part of consumers daily lives
and fast-food companies desire to enhance customer experience.
Fast-Food & Home-Delivery Outlets Current Issues
Smartphone Apps and Mobilised Websites
Smartphone ownership by adults in the UK increased by 44.4% over the past
year, according to The Guardian on 18th July 2012. Ofcoms annual
Communications Market Report found that nearly one in four adults now own
the devices (39%). These gadgets are no longer being used simply to make
phone calls and send text messages. The survey found that 42% of Britons
prefer to use their smartphones when accessing the internet more than any
other technology. This figure has risen by 9 percentage points over the past
year.
Smartphones are playing a progressively prominent role in consumers lives.
The gadgets can be used at any time and perform a variety of tasks. Chains in
the fast-food and takeaway industry have begun adapting to these
developments with the introduction of smartphone applications (apps) and
mobilised websites. These enable consumers to view menus, find the nearest
restaurant and obtain current deals.
Dominos Pizza is at the forefront of this revolution in the industry. As the
leader in the home-delivery market, it has launched apps that allow customers
to place orders using their smartphones. According to the companys half-year
financial statement, 17.9% of its sales in the UK were generated from orders
on mobile devices in the first half of 2012. The popularity and growing
importance of smartphone apps and mobilised websites in the UK is evidenced
by the fact that the companys mobile sales surpassed 1m per week in March
2012, as reported by Caterer and Hotelkeeper on 28th March 2012.
Social Media Advertising Campaigns
Social media advertisements are playing an increasingly important role in
companys marketing campaigns in the UK. Not only are these platforms more
cost effective than traditional main media because they are cheaper, but they
have the capacity to be more influential by creating a dynamic relationship
between the brand and the consumer by bringing a new level of excitement
to the market. Fast-food companies are creating Twitter, Facebook and
YouTube accounts and building up their fan base with games and promotions
that are exclusive to these channels. Customers have responded well and are
proving to be willing participants in these campaigns. Some examples are
outlined below.
In March 2012, Dominos Pizza introduced a Wild West Facebook game to
celebrate the launch of its BBQ pizza. The game asks users a series of questions
that test their knowledge on the Wild West. Every time players answered a
question correctly, they took one step forward in a classic high noon
showdown against BBQ Pete the infamous pizza rustler. After responding
to ten questions correctly, players won the duel and were awarded points,
which were recorded on a scoreboard on Dominos Pizzas Facebook page.
Every Friday, Dominos gave a free pizza to the player in the leading position
on the scoreboard. Other prizes were also available along the way. Fans could
additionally invite their friends to play the game too.
In June, Dominos Pizza unveiled a football app to coincide with the European
Football Championship. It gave iPhone, Android and Facebook users the
opportunity to win pizzas by inviting consumers to tap the app whenever a
goal was being scored. This gave them the chance to win a Dominos voucher
code. The app was not just about pizzas as users could also receive real-time
scores of games being played, as well as fixture information. Simon Wallis, the
brands Sales and Marketing Director, commented in The Drum on
7th June 2012:
Pizza and football are a match made in heaven so we wanted
to inject a bit of fun and competition into the app too with
prizes for fans who have the fastest fingers when the goals are
scored.
In August, Greggs launched a 2-week long online sandwich competition. The
Greggs Sandwich Hero app, which users can access via its Facebook page,
invites fans to create a virtual sandwich. They choose from three fillings, three
salad items, a sauce and a range of bread styles. Once the competition is over,
the company plans to put the top ten suggestions to a public vote. The winning
creation will then be sold on the high street in the UK.
However, these campaigns are not always successful. McDonalds was
humiliated in January 2012 after its Twitter account (#McDStories) backfired.
According to the Financial Times on 24th January 2012, the company had
bought two promoted tweets using Twitters nascent advertising system with
the plan for happy customers to share their McDStories on the messaging site.
However, the account was hit, instead, by a series of unhappy customers who
sent abusive tweets, including complaints about food-poisoning incidents and
allegations of low standards of employee and animal welfare. The fast-food
chain ended up closing the account down.
Electronic Menu Boards and Other Digital Gadgets
Electronic menu boards are full digital LED (light-emitted diode) displays. The
advantages of this technology are that store owners can easily update or
change the menu, display or promotional images with just a few clicks of the
button. Moreover, the innovative signs are better for the environment by
saving on paper and offering consumers a more vivid visual experience,
enhancing their customer experience. McDonalds commenced a trial concept
restaurant in January 2012 in the UK, which features these electronic menu
boards, as well as iPads for children. These devices will be used by all major
fast-food chains in the future.
POLITICAL ISSUES
Public Health Responsibility Deal
In March 2012, a new pledge was announced by the Department of Health as
part of its Public Health Responsibility Deal. Supermarkets, food
manufacturers, caterers and food outlets agreed to cut 5 billion calories from
the nations daily diet. Subway is one of the companies that has signed up to
the pledge. Health Secretary Andrew Lansley commented in the Departments
press release on 26th March 2012, saying: Eating and drinking too many
calories is at the heart of the nations obesity problem. He added: This pledge
is just the start of what must be a bigger, broader commitment from the food
industry. But it is a great step in the right direction.
Then, on 27th July 2012, the Department issued another article which revealed
the creation of three new pledges regarding salt reduction. The ultimate target
is to limit the publics intake to 6 grams (g) of salt a day. According to the press
release, the three pledges focus on training and kitchen practice,
reformulation and procurement. According to Englands 2011 Urinary Salt
Survey, the average consumer currently eats 8.1g of salt a day.
Fast-food Employers Abandon Jobless Work Experience
In summer 2011, the Government unveiled a scheme that allows unemployed
youths, aged 16 to 24, to do unpaid work for up to 2 months without losing
benefits. Called Get Britain Working, the scheme aims to enhance their CV
(curriculum vitae) and give them work experience. Different companies agreed
to sign up to the scheme, including McDonalds, Greggs and Burger King in the
fast-food and home-delivery industry. However, the programme has been
heavily criticised by the media and the public, even branded slave labour by
some.
Although the High Court ruled that the scheme was legal and not a form of
forced labour in August 2012, Greggs and Burger King backed away from the
scheme following public backlash in February. The Guardian quotes a press
release by Burger King on 25th February 2012, which states: Given the recent
concerns expressed by the public we have decided to no longer have any
involvement in the programme. McDonalds continues to support the
programme. However, it has limited work experience duration to 2 weeks,
instead of the schemes 8.
Pasty Tax
On 28th March 2012, Chancellor George Osborne disclosed plans to introduce
20% VAT (value-added tax) on hot baked goods. The proposed tax would cover
products kept hot in a cabinet, on a hot plate, under a heat lamp or on a spit,
but goods that were piping hot from the oven were not included. Dubbed the
pasty tax, it instantly caused uproar among consumers and bakery businesses
alike. In the fast-food and home-delivery industry, Greggs waged a campaign
to fight against the proposed tax; Subway, too, protested. 2 months later, at
the end of May, the Treasury announced that it had narrowed the scope of the
proposed tax, which would no longer affect products in the fast-food and
takeaway industry, unless they were kept hot by foil.
CORPORATE SOCIAL RESPONSIBILITY
In an attempt to combat negative perceptions of the role played by fast-food
chains and takeaway companies in the national obesity epidemic, animal
welfare abuse and the destruction of the environment, major businesses in the
industry are increasingly signing up and emphasising their commitment to
social, environmental and ethical issues. This is part of their growing duty
under the concept of corporate social responsibility (CSR).
Social Causes
Companies have signed up to charities and initiated events to fundraise money
for these organisations. The charities are primarily UK-based, although some
are international too. Fast-food and home-delivery businesses are additionally
combating the negative association between this type of restaurant and the
high levels of obesity and other health problems by promoting healthy
lifestyles. Below are some causes that major actors in the industry have signed
up to:
Burger Kings 150 is the Magic Number campaign that encourages
customers to exercise following the Department of Healths
recommendation that adults achieve at least 150 minutes of moderate to
vigorous intensity physical activity every week. Not only does the burger
chain recommend simple ways to achieve this target, but it also explains on
its website why it is important to exercise and defines what counts as
moderate intensity physical activity.
In November 2010, Dominos Pizza joined forces with The Pennies
Foundation. The organisation is behind the micro-donating scheme Pennies,
an electronic charity box, that invites customers to round up the price of their
orders, thereby donating their spare change to charity. Since then,
Dominos has raised over 230,000. The money is then donated to charities
in the UK. According to a press release on 13th February 2012, the companys
nominated charity is Special Olympics Great Britain. Other charities that it
supports are Northern Ireland Childrens Hospice, Shelter, Together for Short
Lives and the National Society for Prevention of Cruelty to Children (NSPCC).
Greggs Foundation Fortnight is committed to raising funds for local
charities in the UK. The grant-making trust is a registered charity based in
Jesmond, Newcastle Upon Tyne, and has access to 1m every year. According
to Greggs website, the Foundation prioritises organisations that support
voluntary carers, people with disabilities, the homeless and older people. The
baker is also a corporate partner of BBC Children in Need, a cause which it
has supported since 2006.
KFC (Kentucky Fried Chicken) supports the UNs World Food Programme
against hunger. In the UK, it has a partnership with Barnardos, which
supports children and young people. Its focus with the charity is youth
unemployment. In summer 2011, KFC launched a pilot project in the North
of offer work placements and skills development training to youngsters in
Barnardos services. The project is being rolled out in other regions over the
course of 2012.
In 1989, McDonalds founded Ronald McDonald House Charities UK. It is
part of a corporate non-profit organisation that is present in 52 countries
around the world. It sets out to provide support for families with children in
hospital and hospices by providing them with free home away from home
accommodation. This is to help keep family units together during hard and
stressful times. The buildings are located near the hospital or adjacent to the
ward. If possible, the company sets up a direct phone line. In the UK, there
are currently 14 Ronald McDonald Houses and 29 sets of Ronald McDonald
Family Rooms, meaning that there are over 400 bedrooms available.
Environmental and Animal Welfare Concerns
Revelations of the use of caged and genetically modified chickens, mechanised
meat factories and the use of vulnerable rainforest wood for packaging has
damaged the quality credibility of fast-food chains around the world.
Following years of accusations over animal cruelty and more recently the
destruction of the environment, fast-food chains have been keen to step up
their commitment to environmental and animal welfare causes. Below are
some examples.
In April 2012, Burger King vouched to solely use cage-free hens and pigs in
the future. It promised that by 2017, all its eggs will come from cage-free
chickens and that its pigs would be raised in cage-free environments.
McDonalds categorises its environmental commitments under four
headings: litter, waste, energy and packaging. The strategy at the core of
these initiatives is to reduce, reuse, recycle and redesign, with the ultimate
aim being to use less energy. Efforts include minimising energy consumption
in restaurants using technology such as Environmental Biotech drainage
systems and energy lightbulbs, using used cooking oil to fuel its trucks and
using cardboard packaging that is made with 72% recycled material.
Moreover, a key highlight of its Olympic flagship restaurant is that it was
made with sustainable materials and that up to 75% would be reused and
recycled after the event in 2012.
According to its website, KFCs napkins and Krushems cups are made from
recyclable material and its burger boxes are biodegradable. In addition, the
company has decided to stop using palm oil to prevent further deforestation
in Malaysia and Indonesia. New restaurants are being built using sustainable
materials. It also fuels its trucks and other vehicles with used cooking oil. In
2012, the company was awarded the Carbon Trust Standard for reducing its
carbon footprint. KFC has additionally become the first fast-food chain in the
UK to be awarded the Red Tractor logo. The emblem guarantees that
ingredients meet high standards of food safety, environmental protection
and animal welfare.
Ethical Sourcing and Supporting British Trade
Consumers and the media are putting greater pressure on fast-food and
home-delivery companies to source their ingredients ethically, as well as to
support British trade. For example, McDonalds is a signatory to Food Vision,
which pledges to use British ingredients where possible. Following public
protest, the company agreed to source chicken and beef served at the Olympic
and Paralympic Games from domestic farmers instead of abroad. Moreover, in
March the company launched its Farm Forward programme in Britain and the
Republic of Ireland. According to the companys press release on
23rd March 2012, the scheme aims to secure a sustainable future for the
farming industry by supporting existing and young farmers.
McDonalds initially invested 1m to concentrate on five core issues: quality of
ingredients; animal welfare standards; creating work and training
opportunities for young farmers; environmental and efficiency standards; and
knowledge sharing. The programme has been created in collaboration with
leading farmers and agricultural experts including the National Farm Research
Unit, beef and lamb industry organisation EBLEX and FAI Farms. In addition,
in September 2011, it was announced that all fish products served by the
fast-food chain would carry the official Marine Stewardship Council (MSC)
eco-label. The logo certifies that the fish is sustainable and traceable
throughout the entire supply chain.
Other examples of ethical sourcing include KFCs move to ensure all its bone
chicken for its Original Recipe comes from UK farmers. Greggs website also
states that the company sources its products domestically where possible.
Emphasising ethical sourcing and the use of British ingredients marks an
attempt by the industry to boost the perception of quality in the market.
CORPORATE ACTIVITY
Burger King (UK) Ltd
In April 2012, it was announced that Burger King would be relisted on the New
York Stock Exchange (NYSE) in 2 years time, following the purchase of a 29%
stake in the company by the British company, Justice Holdings Ltd. A board
member for the company, Bill Ackman, told The Independent that Justice was
buying the business at the bottom in terms of customer revenues, but that
the company could return to its glory days (4th April 2012). As part of the deal,
Justice will transfer its listing to the NYSE and rename itself Burger King
Worldwide. The fast-food chain has now effectively merged into the Justice
corporate shell. The new Delaware-based holding company went public on
20th June 2012.
Dominos Pizza Group PLC
In December 2011, Dominos moved its UK headquarters from Kingston, Milton
Keynes, to West Ashford in the same area. The new head office is a
state-of-the-art facility that includes a test kitchen for research and
development (R&D). The new site was designed to support the companys
expansion plans to have 1,200 restaurants in the UK and the Republic of Ireland
by 2021. The office is sustainable and was built to BREEAM standards (BRE
Environmental Assessment Method).
On 4th January 2012, Lance Batchelor replaced Chris Moore as Chief Executive
Officer (CEO) for Dominos Pizza Group PLC. Batchelor joined Dominos PLC
Board of Directors in July 2010 and was promoted to Deputy Chief Executive
in June 2011. He commented on his promotion in the companys press release,
saying:
I am looking forward to driving growth, contributing new
ideas and developing new concepts for the business. Dominos
has earned an excellent reputation as the UKs leading pizza
delivery company and I intend to keep us there. In tough times
the best companies thrive, and Dominos is well positioned for
growth.
KFC (GB) Ltd
In February 2012, KFC (GB) Ltd announced that James Watts would be replacing
Misty Reich as Vice President of Human Resources (HR). Watts first joined Yum!
Brands in 2004 as Pizza Huts Organisational Development Manager (ODM). He
was later named KFCs Director of Operations HR in the UK, before joining Yum
Restaurants International (YRI) in December 2008. Prior to his ultimate
promotion, he was Senior Director of HR, for YRI. Misty Reich will now be the
Chief People Officer for the parent company in Texas.
Pizza Hut (UK) Ltd
In February 2012, Yum! Brands appointed PwC to sell the companys 340 UK
restaurant businesses in the UK. The deal excludes its delivery stations. The new
owner will own a stake in the company and will pay a royalty fee, as well as
serving as the master franchisee. The parent company additionally demands
that the new owner focuses on expanding and refurbishing Pizza Hut UK. On
17th July 2012, The Independent listed the names of private-equity firms that
have shown an interest in the business. These are Risk Capital Partners, which
was cofounded by Luke Johnson, an entrepreneur and former chairman of
Pizza Express, as well as Rutland Partners and Endless. Yum! will retain the
rights to the Pizza Hut UK brand.
Select Service Partner UK Ltd
SSP UK appointed Mark Angela as CEO of its UK Republic of Ireland operations
in January 2012, effective in February. He replaces Tony Keating. Angela was
previously employed by Pizza Express Restaurants, where he worked as CEO
for the past 4 years. He was also Managing Director (MD) for the Greene King
Pub Company, as well as serving on the Greene King PLCs board for 3 years.
He additionally has experience working for Colgate-Palmolive and ICI (now
Astra-Zeneca). Angela is quoted in an article by Caterer and Hotelkeeper on
13th January 2012, saying: Given the positive long-term trends in the travel
sector and SSPs unrivalled position within it, this is an exciting time to be
joining a business with such unique expertise and an outstanding portfolio of
brands.
9. The Global Market
INTRODUCTION
Fast-food chains are an American creation. A&W, which was founded in 1916,
was the original fast-food joint, followed by White Castle in 1921. Since then,
the industry has grown into an international business. Demand for this type of
food at the global level is on the rise and companies are doing well in both
mature and developing markets. In March 2011, Subway surpassed McDonalds
as the largest restaurant in the world in terms of venues. On 8th March 2011,
The Wall Street Journal reported that there were 33,749 Subway outlets
compared to 32,737 McDonalds venues at the end of 2010. Still, McDonalds
continues to dominate in terms of revenue.
GLOBAL CORPORATIONS
McDonalds Corporation
According to the Corporations 2011 Annual Report, McDonalds serves nearly
68 million customers around the world every day. That year, global comparable
sales rose by 5.6%, while revenue increased by 12%. Its global strategy is called
Plan to Win and focuses on customer service revolving around these key drivers:
people, products, place, price and promotion. The company is committed to its
menu and value, which both vary according to country and region, based on
cultural preferences, as well as convenience.
McDonalds continues to expand its presence around the world year-on-year.
Between 2009 and 2011, the total number of venues increased by 3.2% to
33,510. The number of franchised restaurants is growing at a faster pace than
those that are company-operated, at 3.3% compared with 2.8%. Franchised
restaurants account for the majority of McDonalds restaurants around the
world (80.8%).
Table 9.1: McDonalds Corporation Number of Restaurants
by Type, Years Ending 31st December 2009-2011
2009 2010 2011
Company-operated
restaurants 6,262 6,399 6,435
Franchised restaurants 26,216 26,338 27,075
Table continues...
Fast-Food & Home-Delivery Outlets The Global Market
by Type, Years Ending 31st December 2009-2011
...table continued
2009 2010 2011
Total 32,478 32,737 33,510
Source: McDonalds Corporation Annual Report, 2011
In total, McDonalds operates in 119 countries. In 2011, 42.1% of its restaurants
were located in the US. This figure, however, has decreased by 0.9 percentage
point since 2009, as the company has focused on increasing its global presence.
More than one in four McDonalds are now found in the APMEA regions, which
groups the Asia-Pacific region, the Middle East and Africa together (26.5%).
The number of restaurants in Asia Pacific, the Middle East and Africa (APMEA)
has risen by 4.4% since 2009. In 2011, 21.4% of all McDonalds were in Europe.
by Region, Years Ending 31st December 2009-2011
2009 2010 2011
US 13,980 14,027 14,098
APMEA
8,488 8,424 8,865

Europe 6,785 6,969 7,156
Other countries and corporate 3,225 3,317 3,391
Total 32,478 32,737 33,510
APMEA indicates Asia/Pacific, Middle East and Africa
Although company-operated McDonalds are a minority, they bring in more
revenue than franchised restaurants at the global level. In 2011,
company-operated sales were valued at $18.29bn, while franchises contributed
$8.71bn. This means that the former accounted for 67.7% of McDonalds
revenues that year. Since 2009, company-operated sales increased by 18.3%,
compared with franchises, which grew by 19.6% over the equivalent period.
Table 9.3: McDonalds Corporation Revenues by Type ($m),
Years Ending 31st December 2009-2011
2009 2010 2011
Company-operated sales 15,459 16,233 18,293
Franchised revenues 7,286 7,842 8,713
Total 22,745 24,075 27,006
Total systemwide sales 56,928 61,147 67,648
In 2011, Europe accounted for 40.3% of McDonalds overall revenues, followed
by the US (31.6%) and APMEA (22.3%). France and Germany account for 50%
of McDonalds European market, while the Peoples Republic of China (PRC),
Australia and Japan represent 55% of its APMEA business in terms of revenue.
The region has doubled its income contribution to the companys total
revenues over the past 6 years.
Yum! Brands Inc
2011 was a successful year for Yum! Brands. Its earnings per share (EPS) rose
by 14%, while its system sales increased by 7%. Its net income was $1.3bn. The
main global restaurant chains owned by the brand include Kentucky Fried
Chicken (KFC), Pizza Hut and Taco Bell. The majority of its outlets are franchises.
These accounted for 72.5% of all venues in 2011. Franchises are playing an
increasingly important role in the company, as their total share of the overall
number of system restaurants has risen by 1.7 percentage points since 2009. In
2011, 7,437 restaurants were company-operated. These represent 20% of all
Yum! Brands restaurants. Its strategy for growth is to build leading brands,
implement an aggressive international expansion policy, improve brand
positioning and drive long-term shareholder franchisee value.
by Type of Ownership, 2009-2011
2009 2010 2011
Company 7,666 7,271 7,437
Franchisees 25,085 26,219 26,928
Licensees 2,199 2,186 2,169
Table continues...
by Type of Ownership, 2009-2011
...table continued
2009 2010 2011
Unconsolidated affiliates 469 525 587
Total 35,419 36,201 37,121
Source: Yum! Brands Inc Annual Report 2011
Yum! Brands primary markets are the US and the PRC. According to its 2011
annual report, the PRC is the best restaurant growth opportunity of the 21st
Century, as its consumer base is expected to double over the next 10 years. For
future growth, the corporation plans to focus on India and Russia, and France
and Germany in the European region.
Table 9.5 shows that almost half of Yum! Brands restaurants are located in the
US (48.6%). Having said that, there are more KFC venues classified under its
international category than either the US or the PRC. Moreover, although the
PRC is its second biggest market, there are four times as many Yum!
Brands-owned restaurants in the US than in the East Asian country. In the US,
there are more Pizza Hut and Taco Bell restaurants than KFC outlets; however,
KFC venues dominate at the global level, exceeding its sister brands by 3,654
and 11,456 outlets, respectively.
Table 9.5: Number of Yum! Brands Inc System Restaurants
by Brand, 2011
KFC Pizza Hut Taco Bell Total
US 4,780 7,600 5,670 18,050
International 8,920 5,383 275 14,578
PRC 3,701 764 - 4,493
Total 17,401 13,747 5,945
37,121
KFC Kentucky Fried Chicken
PRC Peoples Republic of China
Company sales accounted for 86.3% of Yum! Brands total revenue in 2011.
Although contributing more to company revenue than franchises and licensed
restaurants, the categorys percentage share has shrunk by 0.6 percentage
points since 2009. Still, its value has risen by 15.7% over the 2-year period. In
2011, company sales amounted to $10.89bn. By comparison, franchise and
licensee fees and income were valued at $1.73bn. This figure has risen by 21.8%
since 2009, a faster rate than company sales.
Table 9.6: Yum! Brands Inc Revenues by Company
and Franchised Sales ($m), 2009-2011
2009 2010 2011
Company sales 9,413 9,783 10,893
Franchise and licensee fees and
income 1,423 1,560 1,733
Total 10,836 11,343 12,626
Burger King Worldwide
By the end of 2011, there were 12,512 Burger Kings in 81 countries, in addition
to the US and its territories. The majority of these restaurants (89.6%) were
franchises. Only 10.4% were company-owned. The importance of these types
of business in the company is declining with the exception of in Latin America,
where there are currently three more company-operated venues than in 2009.
During the 2-year period, the number of restaurants operated by Burger King
itself fell by 8.9%.
By contrast, the number of franchised restaurants increased by 5.3% to 11,217.
The number of franchised restaurants in the US and Canada remained stagnant
between 2009 and 2011. Still, there are roughly twice as many franchised
restaurants in the region than in EMEA/APAC and nearly six times as many as
in Latin America. However, 402 new Burger King franchises have been founded
in EMEA/APAC and 114 have been opened in Latin America since 2009,
compared to just 45 in the US and Canada. These figures reflect Burger Kings
global strategy, which is to aggressively expand its presence in high-growth
emerging markets, according to The Wall Street Journal on 15th June 2012.
Table 9.7: Burger King Holdings Inc Number of Restaurants
by Type, Years Ending 30th June 2009-2011
2009 2010 2011
Number of Company-Owned Restaurants
US and Canada 1,029 984 939
EMEA/APAC
299 264 259

Latin America 94 96 97
Total company-owned
restaurants 1,422 1,344 1,295
Number of Franchised Restaurants
US and Canada 6,516 6,566 6,561
EMEA/APAC
3,129 3,297 3,531

Latin America 1,011 1,044 1,125
Total franchised restaurants 10,656 10,907 11,217
Total Restaurants System-Wide
US and Canada 7,545 7,550 7,500
EMEA/APAC
3,428 3,561 3,790

Latin America 1,105 1,140 1,222
Total restaurants
system-wide 12,078 12,251 12,512
indicates Europe, the Middle East and Africa/Asia Pacific
Source: Burger King Holdings Inc Annual Report, 2011
Burger Kings revenue has declined year-on-year since 2009. In 2011, the
company reported revenues of $2.34bn, down from $2.54bn in 2009.
Company-owned Burger Kings bring in more than twice as much revenue as
franchise and property operations for the company. In 2011, company
restaurant revenues accounted for 70.2% of revenue. This figure has fallen by
3.9 percentage points since 2009. Franchise and property revenues rose by
6.1% to $697m during the same time period.
Table 9.8: Burger King Holdings Inc Revenues by Source ($m),
Year Ending 30th June 2009-2011
2009 2010 2011
Company restaurant revenues 1,881 1,839 1,639
Franchise and property
revenues 657 663 697
Total
2,537 2,502 2,336

Source: Source: Burger King Holdings Inc Annual Report, 2011
Table 9.9 breaks down Burger Kings revenue by region. It reveals that the sole
region that has increased its revenue on a year-on-year basis since 2009 was
Latin America. Its contribution has risen by 1.3 percentage points during the
time period to 5.5% in 2011. Revenues in EMEA/APAC rose by 1.6% in 2010,
but then fell by 8.5% in 2011 to $639m. In 2011, 67.2% of Burger Kings revenue
came from the US and Canada. However, revenues in the region have dropped
by 10% since 2009.
Table 9.9: Burger King Holdings Inc Revenues by Region ($m),
Years Ending 30th June 2009-2011
2009 2010 2011
US and Canada 1,743 1,695 1,569
EMEA/APAC
687 698 639

Latin America 107 109 128
Total 2,537 2,502 2,336
indicates Europe, the Middle East and Africa/Asia Pacific
Source: Burger King Holdings Inc Annual Report, 2011
10. Forecasts
INTRODUCTION
General Economic Forecasts
Economic trends will continue to affect the state of the environment within
which fast-food and home-delivery outlets operate in the UK in the future.
Table 10.1 summarises official forecasts for major factors between 2012 and
2016. It reveals that the Government expects the economic crisis to remain. This
means that consumers will continue to favour good value, which bodes well
for the industry.
The population in the UK is expected to continue increasing over the next
5 years. Population growth is favourable for the fast-food and home-delivery
industry as it expands its potential consumer base. Changes in demographics
may affect the demand for different types of food as companies introduce
menus that target specific groups, including children and ageing baby
boomers.
Table 10.1: Economic Forecasts (000, % and million), 2012-2016
2012 2013 2014 2015 2016
UK resident
population (000) 63,244 63,758 64,271 64,776 65,271
GDP growth (%) 0.1 1.4 2.0 2.4 2.5
Inflation
(%) 3.4 2.6 2.9 3.4 3.4

Unemployment
(million) 1.60 1.67 1.61 1.51 1.40

GDP gross domestic product
at retail price index (RPI)
actual number of claimants; claimant count measures the number of people claiming
Jobseekers Allowance
Source: National Population Projections, 2010-based projections, National
Statistics website/Forecasts for the UK Economy, August 2012, Treasury
Independent Average Crown copyright material is reproduced with the
permission of the Controller of HMSO (and the Queens Printer for Scotland)
Fast-Food & Home-Delivery Outlets Forecasts
The economic crisis is predicted to persist in the future. Although gross
domestic product (GDP) is forecast to rise year-on-year, it will stagnate by 2016.
Inflation will remain well-above the optimum 2% rate throughout the 5-year
period; meanwhile, although unemployment is expected to fall after 2013,
around 1.4 million workers will remain unemployed by 2016. Despite this, the
market is unpredictable and it is difficult to predict the state of the economy
in 5 years time. Nevertheless, Key Note estimates that the fast-food and
home-delivery industry will continue to grow during the time period.
The good value offered by the fast-food and home-delivery market, its
convenience and the availability of healthier options will continue to draw in
customers. Moreover, product and flavour innovation will keep consumers on
their toes and help companies differentiate themselves from their competitors.
Still, tough market conditions, combined with fierce competition in the
industry, means that sustaining profit will be no easy ride. Companies will have
to find the balance between rising input costs and the demand for quality
products made using British and/or ethically sourced ingredients with good
value.
FORECASTS 2012 TO 2016
Key Note predicts that the value of the fast-food, takeaway and home-delivery
market will continue to increase over the next 5 years. By 2016, the industry
will be worth 13.61bn after rising by 24.5% over the period. Growth will be
steady, though it will slow over the years due to the intensity of market
conditions and competition in the industry.
In 2012, the fast-food, takeaway and home-delivery market is expected to rise
by 6.3% to 10.93bn. The industry will grow at a faster pace than in 2011 as it
benefits from the years festivities and events. Many consumers are expected
to have watched the European Football Championship, the Queens Diamond
Jubilee celebrations and the London Olympic and Paralympic Games on
television and eaten takeaways and home-delivered foods in the process.
(m at rsp), 2012-2016
2012 2013 2014 2015 2016
Sandwiches 3,410 3,598 3,778 3,960 4,140
% change year-on-year 6.0 5.5 5.0 4.8 4.5
Burgers 2,505 2,630 2,748 2,865 2,980
Pizza 1,270 1,346 1,427 1,510 1,593
Table continues...
(m at rsp), 2012-2016
...table continued
2012 2013 2014 2015 2016
Fish and chips 1,088 1,099 1,108 1,115 1,121
Chicken 809 878 946 1,017 1,088
Other fast-food/
Total 10,930 11,603 12,261 12,932 13,605
Source: Key Note
The other fast-food and takeaway outlets category will be the fastes-growing
sector in the market. Consumer interest in exotic cuisines and a demand for
more adventurous flavours will boost the segments value. It is forecast to rise
by 45.2% to 2.68bn during the 5-year period.
The chicken category will also grow ahead of the overall market. Poultry is
considered to be healthier than red meat. Its rise in value by 34.5% between
2012 and 2016 will coincide with the influx in more healthy meals in the
industry. This phenomenon helps to explain why the burgers sector is the only
one in which the rate of growth will be lower in 2012 than in 2011. Burger sales
will be driven by innovative sauce flavours and the use of alternative breads as
buns that give an exotic theme to the meals. The categorys value is predicted
to grow by 19% to 2.98bn between 2012 and 2016.
The pizza sector is set to rise by 25.4% to 1.59bn between 2012 and 2016.
Mobile and online sales will be key contributors to the segments growth.
Lighter variants and innovative flavours will help to boost the categorys value.
Consumers fast-paced lifestyles and demand for on-the-go solutions,
particularly at breakfast, will push sandwich sales in the future. Key Note
calculates that the sector will be worth 4.14bn by 2016, after growing by
21.4%. Meals deals will be a dominant feature in the sector as companies
emphasise value in the market.
Fish and chips businesses, the majority of which are independent, will struggle
in the future, unable to cope with the difficulties that accompany the economic
crisis, including a slow-down in consumer outings to restaurants, increasing
production and operating costs and the rising price of sustainability in the
fishing industry. The sector is expected to stagnate and rise by a mere 3% over
the time period.
Figure 9.1, below, illustrates the market share of the sectors over the 5-year
period.
Figure 10.1: The Forecast UK Fast-Food, Takeaway
and Home-Delivery Market by Sector by value at Current Prices
(m at rsp), 2012-2016
Sandwiches
Burgers
Pizza
Fish and chips
Chicken
Other fast-food
/takeaway outlets
2
0
1
2
2
0
1
3
2
0
1
4
2
0
1
5
2
0
1
6
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Source: Key Note
MARKET GROWTH
Figure 10.2, on the following page, illustrates the trajectory of the fast-food
and home-delivery industry between 2007 and 2016. The market is predicted
to grow by 58.3% from 8.59bn to 13.61bn during the time period.
Figure 10.2: Growth in the UK Fast-Food, Takeaway
and Home-Delivery Market by Valye at Current Prices
(m at rsp), 2007-2016
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
12,500
13,000
13,500
14,000
Source: Key Note
FUTURE TRENDS
Social Media Campaigns
Social media campaigns will play an increasingly important role in the fast-food
and home-delivery industry. These are a less expensive but equally, if not more,
effective way of promoting products and brands. Enterprises will use these
platforms for their marketing campaigns, which will help to minimise costs to
counter balance rising production and operating costs. Moreover, consumers
will remain keen to interact with companies via these new channels, whether
it be by participating in competitions or by playing games created by their
favourite fast-food chains.
Exotic Flavours and Innovative Products
The days of the ordinary burger joint are dying out. Consumer demand for
more adventurous products and exciting flavours, as well as for alternative
healthy foods, means that companies will diversify their portfolios in the future
to include more exotic and original options. Mexican, Caribbean and
African-inspired recipes are some of the innovation expected by Key Note in
the industry. Meals made with alternative breads, atypical sides and sauces that
bring spice and zest will play an increasingly important role in the market in
the future. This will help fast-food chains stand out against competitors in a
cut-throat market and during difficult economic times.
Healthier Options
Pressure from the media and Government, as well as consumer demand for
healthier options, means that there is a niche in the market for businesses to
exploit, which they will do in the future. This trend will help fast-food chains
to maximise sales in the industry. Companies will continue to reduce calories,
fat, sugar, salt and other unhealthy ingredients in their recipes, highlighting
the reformulated recipes and healthiness in their media campaigns, on menu
boards and on restaurant fixtures.
Greater Use of Quality Ingredients
In the future, companies will continue their fight to break the connotation
between fast-food and takeaways and the use of poor quality ingredients,
including genetically modified chicken and pink slime, which refers to
ground, finely textured beef, made of mechanically separated fat and beef
trimming. Moreover, in order to improve the reputation of the industry,
restaurants will increasingly opt for free-range and locally sourced products,
in addition to supporting social and environmental causes. Furthermore, the
introduction of premium ranges will mark an attempt by fast-food chains to
combat negative perceptions that continue to hit the industry.
Value
As the economic crisis drags on, consumers will continue to make a conscious
effort to save money by looking for the best bargains. When eating out, this
will increasingly mean opting to eat in a fast-food outlet, as it offers better
value than most other types of restaurants. Moreover, as chains improve the
quality of their recipes and offer healthier options, they will be better able
cater to the needs of a broader consumer base. Good value will be a key driver
in the industrys growth in the future.
11. Company Profiles
INTRODUCTION
The following section contains financial profiles of some of the principal
companies identified as operating within the market sector discussed in this
report. The financial results of some of the important names within the sector
may not be reported if:
their principal activities are so varied that their results are not considered
applicable to the survey
they are no longer trading as separate companies
their financial data are very out of date.
DEFINITIONS
A company which has a Y consolidated value has filed consolidated accounts
for the relevant year.
denotes that the growth rate calculation is invalid, because the figures
either move from positive to negative or from negative to positive.
Turnover (Sales)
This includes all income derived from the principal activities of the firm, net of
VAT. It encompasses UK sales, exports and overseas and intercompany sales.
Pre-Tax Profit
The net trading profit figure after deduction of all operating expenses,
including depreciation and finance charges but before deduction of tax,
dividends, subventions or group relief, and other appropriations. Where
applicable, it will include the share of profits and losses of associated
companies. Items described by the company as exceptional are included;
extraordinary items are excluded.
Profit Margin
Pre-tax profit expressed as a percentage of sales.
Average Remuneration
Total employee remuneration divided by the number of employees.
Sales per Employee
Sales divided by the number of employees.
FURTHER INFORMATION
For more detailed financial information telephone Key Note on: 0845-504
0452.
Fast-Food & Home-Delivery Outlets Company Profiles
BURGER KING (UK) LTD
Registered Office 15 Bath Road
Slough
Berkshire, SL1 3UF
Telephone: 01753-500 000
Company Registration Number 05811453
Date of Incorporation 09/05/06
Holding Company None
Ultimate Holding Company Burger King (Luxembourg) SaRL
Previous Name(s) and Date(s) of Change
None
Principal Activities
The operation of the Burger King franchise business in the UK and the Republic of Ireland for
Burger King Europe GmbH, which includes franchise brand support and marketing activities.
SIC Code
74849, Other business activities not elsewhere classified.
Structure
Burger King Ltd is the UK subsidiary of Burger King Worldwide, a Delaware-based holding
company that owns the global burger chain brand. It was established in June 2012 following a
merger with Justice Holdings Ltd, a London investment firm. The new company went public on
the New York Stock Exchange (NYSE) on 20th June 2012. In 2010, the Burger King franchise was
purchased by 3G Capital for $3.2bn. The first Burger King restaurant was opened in the UK in
1977 and there are now over 500 venues in the country.
Brand Information
Burger King operates a single brand in the UK, although some are owned by the company, while
others are franchises.
Recent Developments
In August 2011, Burger King initiated plans to re-launch its brand in the UK. Since, product
innovation in a limited-edition format has been key to Burger Kings brand strategy in the UK.
In addition, the company has been committed to improving customer services, including
through the use of a customer feedback tool, as well as boosting its portfolio with better quality
ingredients and healthier menu options.
FINANCIAL PROFILE
Year End 30/06/10 30/06/09 30/06/08 30/06/07
Weeks 52 52 52 52
Consolidated N N N N
Sales
Sales (000) 7,074 8,572 9,360 9,658
% change year-on-year -17.48 -8.42 -3.09 -
Exports (000) - - - -
Exports/Sales (%) - - - -
Profits
Pre-Tax Profit (000) 491 406 591 584
% change year-on-year 20.94 -31.30 1.20 -
Profit Margin (%) 6.94 4.74 6.31 6.05
Operating Profit (000) 491 369 501 562
Employees
Number of Employees 54 52 51 51
Average Employee Remuneration () 35,556 61,385 60,686 65,745
Sales per Employee () 131,000 164,846 183,529 189,373
Profit per Employee () 9,093 7,808 11,588 11,451
Capital Employed per Employee () 25,778 20,731 15,588 7,804
Balance Sheet/Ratios
Capital Employed (000) 1,392 1,078 795 398
Return on Capital (%) 35.27 37.66 74.34 146.73
Net Worth (000) 1,392 1,078 794 397
Current Ratio 1.21 1.13 1.09 1.04
Liquidity Ratio 1.21 1.13 1.09 1.04
DOMINOS PIZZA GROUP PLC
Registered Office 1 Thornbury
West Ashland
Milton Keynes
Buckinghamshire, MK6 4BB
Ultimate Holding Company None
Dominos Pizza UK & Ireland PLC (23/05/12)
Dominos Pizza PLC (01/11/99)
Doublemeasure PLC (15/10/99)
A group engaged in the operation and development of the Dominos Pizza home-delivery
franchise brand and in property management and equipment leasing.
SIC Codes
55303, Take-away food shops.
Structure
On 1st May 2012, Dominos Pizza UK & Ireland Ltd changed its name to Dominos Pizza Group
PLC. The business is comprised of operations in Germany, in addition to the UK and the Republic
of Ireland. The company is a subsidiary of Dominos Pizza, Incorporated. The first Dominos Pizza
in the UK was opened in 1985. It is now listed on the London Stock Exchange (LSE) and operates
nearly 700 outlets in the UK.
Brand Information
Dominos Pizza solely operates its own brand name. The majority of restaurants in the UK are
franchises.
Recent Developments
Dominos Pizza has recently introduced a series of new products. These include a Gourmet
range, Mexican pizza and different stuffed crusts. The innovation reflects the chains attempt
to meet consumers growing demand for quality and dynamic fast food. The company has been
at the forefront of social media campaigns in the industry. It has particularly benefitted from
mobile and online sales, due to its delivery services. Sales have been boosted by the years events,
including the Queens Diamond Jubilee and the London Olympic and Paralympic Games. In
December 2011, Dominos moved its UK headquarters from Kingston, Milton Keynes, to West
Ashford in the same area. On 4th January 2012, Lance Batchelor replaced Chris Moore as the
companys Chief Executive Officer (CEO) in the UK.
FINANCIAL PROFILE
Year End 25/12/11 26/12/10 27/12/09 28/12/08
Weeks 52 52 52 52
Consolidated Y Y Y Y
Sales
Sales (000) 209,863 188,149 155,044 135,977
% change year-on-year 11.54 21.35 14.02 -
Exports (000) 19,709 17,955 13,684 13,021
Exports/Sales (%) 9.39 9.54 8.83 9.58
Profits
Pre-Tax Profits (000) 38,789 35,204 40,968 22,149
Profit Margin (%) 18.48 18.71 26.42 16.29
Operating Profit (000) 39,366 35,663 26,058 23,685
Employees
Capital Employed (000) 90,831 95,443 80,167 36,086
Net Worth (000) 41,249 39,277 19,820 11,481
Current Ratio 0.87 1.37 1.04 1.30
GREGGS PLC
Registered Office Fernwood House
Clayton Rd
Jesmond
Newcastle Upon Tyne, NE2 1TL
Telephone: 0191-281 7721
Greggs Bakeries Ltd (30/12/83)
A group engaged in the manufacture and retail of bread, flour confectionery, sandwiches and
savoury products and the provision of catering within the shops.
SIC Codes
52240, Retail sale of bread, cakes, flour confectionery and sugar confectionery.
55303, Takeaway food shops.
15899, Manufacture of other food products not elsewhere classified.
15810, Manufacture of bread; manufacture of fresh pastry goods and cakes.
15139, Other meat and poultry meat processing.
Structure
Greggs PLC is a British company whose origins date back to the 1930s. It now owns nearly 1,600
bakeries throughout the UK, and is the largest fast-food and takeaway chain in the country in
terms of the number of restaurants. The company is headquartered in Newcastle Upon Tyne.
Brand Information
Greggs is the companys core brand. It used to operate Bakers Oven outlets, but these have been
converted to the Greggs fascia. In 2012, the company opened two new types of outlets: Greggs
the Bakery and Greggs Moment, its first coffee shop.
Recent Developments
Greggs has plans to make Wi-Fi available in all of its shops across the UK. In October, it signed
a deal with Moto Hospitality to open shops in motorway service stations. It now supplies Iceland
with an at-home range, which will be exclusive to the retailer until at least April 2013.
FINANCIAL PROFILE
Year End 31/12/11 01/01/11 02/01/10 27/12/08
Weeks 52 52 53 52
Consolidated Y Y Y Y
Sales
Sales (000) 701,088 662,326 658,186 628,198
Exports (000) - - - -
Profits
Pre-Tax Profits (000) 60,500 52,523 48,779 49,470
% change year-on-year 15.19 7.68 -1.40 -
Profit Margin (%) 8.63 7.93 7.41 7.87
Employees
Number of Employees 19,504 19,181 19,044 19,414
Net Worth (000) 206,531 184,701 172,953 155,697
Current Ratio 0.69 0.75 0.84 0.53
KENTUCKY FRIED CHICKEN (GB) LTD
Registered Office 32 Goldsworth Road
Woking
Surrey, GU21 1JT
Telephone: 01483-717 000
Holding Company Restaurant Holdings (UK) Ltd
Ultimate Holding Company Yum! Brands Inc
None
The sale of Kentucky Fried Chicken (KFC) through company-owned stores and the receipt of
licence income from franchises of the KFC trade-marks and processes.
SIC Code
55303, Takeaway food shops.
Structure
KFC (GB) Ltd is part of the KFC global franchise, which specialises in fried chicken. It is one of
three fast-food chains, alongside Pizza Hut and Taco Bell, which make up Yum! Brands, the
restaurants division of the conglomerate PepsiCo. There are currently over 800 KFCs in the UK
and the Republic of Ireland.
Brand Information
KFC restaurant ownership in the UK is split 40% equity and 60% franchise.
Recent Developments
In July 2012, KFC began to offer a BA honours degree in Business Management, in conjunction
with De Montfort University Leicester. The companys latest brand strategy is to capitalise on
social media forums, such as Facebook and Twitter. In February 2012, KFC announced that James
Watts would be replacing Misty Reich as Vice President of Human Resources (HR).
FINANCIAL PROFILE
Year End 28/11/10 29/11/09 30/11/08 02/12/07
Weeks 52 52 52 52
Sales
Sales (000) 371,215 360,109 316,719 292,202
Exports (000) - - - -
Profits
Pre-Tax Profits (000) 38,389 41,987 27,854 24,191
% change year-on-year -8.57 50.74 15.14 -
Profit Margin (%) 10.34 11.66 8.79 8.28
Employees
Net Worth (000) 60,100 58,580 49,954 31,968
Current Ratio 0.37 0.46 0.39 0.48
MCDONALDS RESTAURANTS LTD
Registered Office 11/59 High Road
East Finchley
London, N2 8AW
Telephone: 08702-413 300
Holding Company McDonalds Real Estate LLP
Ultimate Holding Company McDonalds Corp Inc
McDonalds Hamburgers Ltd (28/02/89)
McDonalds Hamburgers Ltd (08/02/89)
The operation of a chain of limited menu quick-service restaurants.
SIC Code
55302, Unlicensed restaurants and cafs.
Structure
McDonalds Restaurants Ltd is the British subsidiary of the McDonalds Corporation, the worlds
leading fast-food chain in terms of revenue. The company specialises in hamburgers. In the UK,
it owns 1,200 restaurants. It is both a sit-down restaurant and has takeaway services.
Brand Information
The company brand is McDonalds restaurants. Roughly 65% of venues in the UK are franchises.
Recent Developments
Innovation and improved customer service have been at the core of the companys recent
developments. Moreover, the fast-food chain has committed itself to the health trend, including
calorie counts on its food boards and developing products, including Fruitizz, a childrens drink
that provides them with one of their 5-a-day. McDonalds was named the official restaurant of
the 2012 London Olympic and Paralympic Games. It operated four temporary venues at the
Olympic Park in Stratford during the event.
FINANCIAL PROFILE
Year End 31/12/10 31/12/09 31/12/08 31/12/07
Weeks 52 52 52 52
Sales
Sales (000) 1,184,462 1,129,957 1,075,535 1,069,780
Exports (000) - - - -
Profits
Pre-Tax Profits (000) 157,211 114,048 77,743 39,973
Profit Margin (%) 13.27 10.09 7.23 3.74
Employees
Net Worth (000) 355,953 212,672 137,371 87,332
Current Ratio 0.18 0.15 0.19 0.17
PIZZA HUT (UK) LTD
Registered Office Building 1
Imperial Place
Elstree Way
Borehamwood,
Herts, WD6 1JN
Telephone: 020-8732 9000
Holding Company Yum! III (UK) Ltd
Ultimate Holding Company Yum! Brands Inc
Dianthus Trading Company Ltd (31/12/78)
Restaurateurs and delivery operators.
SIC Code
None
Structure
Pizza Hut (UK) Ltd is part of Pizza Hut Incorporated. The parent company belongs to Yum!
Brands, the restaurant division of the corporate giant PepsiCo. There are almost 700 Pizza Huts
in the UK.
Brand Information
The company operates under its own brand, Pizza Hut. Roughly 22% of its restaurants in the
UK are franchises.
Recent Developments
Pizza Hut has struggled in the UK in recent times. As a result, in August 2011, Pizza Hut
announced that it would be overhauling its business in the UK, including by trialling four Alpha
Hut concept stores that are inspired by upmarket Argentinean restaurants, where waiters bring
trays to customers tables. It hopes that by becoming more in tune with consumers lifestyles
and by improving customer service, it will be able to reboot its business in the UK. Pizza Hut
now gives customers unlimited access to its salad bar, in order to boost its health credentials.
In addition, it has launched a new menu, which includes both a lighter and a premium range,
reflecting market trends in the UK.
FINANCIAL PROFILE
Year End 04/12/11 28/11/10 29/11/09 30/11/08
Weeks 53 52 52 52
Sales
Sales (000) 330,959 346,174 362,549 358,626
% change year-on-year -4.40 -4.52 1.09 -
Exports (000) - - - -
Profits
Pre-Tax Profits (000) -24,178 -22,185 -12,122 -13,306
% change year-on-year -
Profit Margin (%) -7.31 -6.41 -3.34 -3.71
Operating Profit (000) -13,928 -19,005 -6,889 -8,256
Employees
Profit per Employee () -1,735 -1,365 -714 -737
Return on Capital (%) -67.24 -116.81 -29.03 -48.05
Net Worth (000) 31,407 11,642 31,470 4,724
Current Ratio 0.38 0.20 0.24 0.16
SUBWAY REALTY LTD
Registered Office Chaston House
Mill Court Hinton Way
Great Shelford
Cambridgeshire, CB22 5LD
Telephone: 01223-550 820
Speed 8706 Ltd (10/04/01)
The holding of head leases and subletting of property to franchisees who operate Subway
sandwich shops.
SIC Codes
70209, Other letting of own property.
Structure
Subway Realty Ltd is the UK branch of the US sandwich and salad franchise, Subway. The parent
company trades under the name Doctors Associates, Incorporated, which is owned by its
founders Fred DeLuca and Peter Buck. The first Subway in the UK opened its doors in 1996. The
chain now operates over 1,400 shops in the UK and the Republic of Ireland.
Brand Information
Subway is the companys brand name.
Recent Developments
In January 2012, John DeLuca announced the companys ambition to create 600 new Subway
in the UK and the Republic of Ireland by 2015. This is part of a plan to treble its number of stores
in the UK in the future. The company plans to achieve this by setting up outlets in
non-conventional places. This includes a Sixth Form College in Didsbury, Greater Manchester:
Parrs Wood High School. Subway is in talks with the school over a potential concession on the
grounds. The sandwich chain hopes that the tactic will enable it to reach a broader consumer
base in the long run. Healthier options and value deals are also at the core of its recent
developments.
FINANCIAL PROFILE
Year End 31/12/10 31/12/09 31/12/08 31/12/07
Weeks 52 52 52 52
Sales
Sales (000) 26,282 24,818 18,946 14,236
Exports (000) - - - -
Profits
Pre-Tax Profits (000) 1,440 651 714 659
Profit Margin (%) 5.48 2.62 3.77 4.63
Operating Profit (000) 1,440 652 706 651
Employees
Sales per Employee () 3,754,571 827,267 728,692 749,263
Capital Employed (000) 3,714 2,574 1,391 887
Net Worth (000) 2,885 1,854 1,391 887
Current Ratio 1.63 1.48 1.32 1.57
12. Company Financials
The following companies, listed in alphabetical order, are taken from the Key
Note database.
When the latest accounts for a company are made available by Companies
House, they can be incorporated on our database and be made ready for
inclusion in Key Note Market Report Plus. A short delay occurs at Companies
House between receipt of documents and their public release. As this delay can
be longer, the availability of accounts can sometimes be affected.
It should be noted that the financial results for certain companies are not
restricted to sales of the products covered by this report.
Turnover
(000)
Pre-Tax Profit
(000) Year End
Company
Adil Catering Ltd 8,539 373 31/03/12
Allied Domecq Ltd - - 30/06/11
Bella Italia Restaurants
Ltd 67,628 10,250 29/05/11
Benugo Ltd 44,080 2,187 30/12/11
Breadwinner Foods Ltd 61,143 3,160 30/09/11
Burger King (UK) Ltd 7,074 491 30/06/10
Caff Nero Group Ltd 165,583 17,354 31/05/11
Courts Quality Foods
Ltd 4,052 206 30/12/10
Compass Group PLC 15,833,000 958,000 30/09/11
Dlice de France PLC 147,164 4,355 31/07/11
Delifrance (UK) Ltd 128,551 -702 31/12/10
Dominos Pizza Group
PLC
209,863 38,789 25/12/11

EAT Ltd 87,359 2,740 30/06/11
Favorite Fried Chicken
Ltd 3,183 219 31/01/12
Gondola Group Ltd 569,500 -47,000 26/06/11
Greggs PLC 701,088 60,500 31/12/11
Harry Ramsdens Ltd 18,880 -1,471 26/12/10
Kaykem Fast Foods Ltd - - 31/08/11
Fast-Food & Home-Delivery Outlets Company Financials
Turnover
(000)
Pre-Tax Profit
(000) Year End
Kentucky Fried Chicken
(GB) Ltd 371,215 38,389 28/11/10
McDonalds Restaurants
Ltd 1,184,462 157,211 31/12/10
Nandos Chickenland
Ltd 317,356 31,496 27/02/11
Noon Products Ltd 165,741 1,141 31/12/10
Papa Johns (GB) Ltd
18,906 -1,965 26/12/10

PizzaExpress
(Restaurants) Ltd 322,490 58,641 26/06/11
Pizza Hut (UK) Ltd 330,959 -24,178 04/12/11
Pontis Group Ltd 20,447 2,215 30/01/11
Pret A Manger (Europe)
Ltd 316,926 34,643 29/12/11
The Restaurant Group
PLC 487,114 48,608 01/01/12
Rollover Ltd 9,222 1,029 31/01/12
Select Service Partner
UK Ltd 548,082 4,769 28/09/11
Sheermans Ltd 12,338 904 31/07/11
SME Group PLC 47,162 4,321 27/03/11
Spudulike Group Ltd 17,254 675 30/12/10
Starbucks Coffee
Company (UK) Ltd 397,716 -32,854 02/10/11
Subway Reality Ltd 26,282 1,440 31/12/10
Whitbread PLC 1,778,000 305,800 01/03/12
Yo Sushi UK Ltd 50,312 3,961 28/11/10
company previously known as Dominos Pizza UK & IRL PLC
company previously known as Perfect Pizza Ltd
Fast-Food & Home-Delivery Outlets Company Financials
13. Further Sources
Publications
Bakery Info
William Reed Business Media
Broadfield Park
Crawley
West Sussex, RH11 9RT
http://www.bakeryinfo.co.uk

Business Insider
257 Park Avenue South
13th Floor
New York, NY 10010
US
http://www.businessinsider.com

Caterer and Hotelkeeper
Reed Business Information
Quadrant House
The Quadrant
Sutton
Surrey, SM2 5AS
Telephone: 020-8652 4424
Fax: 020-8652 8973
E-mail: info@catererandhotel
keeper.com
http://www.caterersearch.com

The Daily Mail
Associated Newspapers Ltd
Northcliffe House
2 Derry Street
London, W8 5TT
Telephone: 020-7938 6000
http://www.dailymail.co.uk

The Daily Telegraph
111 Buckingham Palace Road
London, SW1W 0DT
Telephone: 020-7931 2000
http://www.telegraph.co.uk

The Drum
Mercat Building
4th Floor
26 Gallowgate
Glasgow, G1 5AB
Telephone: 0141-552 5858
E-mail: enquiries at thedrum.com
http://www.thedrum.co.uk

The Financial Times
One Southwark Bridge
London, SE1 9HL
http://www.ft.com

The Grocer
William Reed Business Media
Broadfield Park
Crawley
West Sussex, RH11 9RT
http://www.thegrocer.co.uk

The Guardian
Kings Place
90 York Way
London, N1 9GU
Telephone: 020-3353 2000
http://www.guardian.co.uk

The Independent
2 Derry Street
London, W8 5HF
Telephone: 020-7005 2000
http://www.independent.co.uk

Fast-Food & Home-Delivery Outlets Further Sources
Marketing Magazine
Haymarket Business Information
174 Hammersmith Road
London, W6 7JP
Telephone: 020-8267 5000
http://www.marketing
magazine.co.uk

Marketing Week
Centaur Media PLC
Wells Point
79 Wells Street
London, W1T 3QN
Telephone: 020-7970 4000
http://www.marketingweek.co.uk

Pizza News
35a Greenford Road
Greenford
Middlesex, UB6 9AU
http://www.pizzanews.co.uk

Popsop
1-3 Floor
124 Baker Street
London, W1U 6TY
Telephone: 020-7193 0876
http://popsop.com

PR Week
Haymarket Business Media
22 Bute Gardens
London, W6 7HN
Telephone: 020-8267 4429
http://www.prweek.com

The Wall Street Journal
1211 Avenue of the Americas
New York, NY 10036
US
http://uk.wsj.com
General Sources
Kantar Media
Ealing Gateway
26-30 Uxbridge Road
Ealing
London, W5 2BP
Telephone: 020-8433 4000
Fax: 020-8433 4001
http://www.kantarmedia.com

Nielsen
Atrium Court
The Ring
Bracknell
Berkshire, RG12 1BZ
Telephone: 01344-469 100
Fax: 01344-469 102
E-mail: mediacommunication
uk@nielsen.com
http://www.nielsenmedia.co.uk

NEMS Market Research
22-23 Manor Way
Belasis Hall Technology Park
Billingham, TS23 4HN
Telephone: 01642-373 355
Fax: 01642-373 350
http://www.nemsmr.co.uk
Government Publications
Department of Health
Richmond House
79 Whitehall
London, SW1A 2NS
http://www.dh.gov.uk

HM Treasury
1 Horse Guards Road
London, SW1A 2HQ
Telephone: 020-7270 4558
Fax: 020-7270 4861
http://www.hm-treasury.gov.uk
Forecasts for the UK Economy
Treasury Independent Average,
August 2012

National Statistics
Government Buildings
Cardiff Road
Newport
South Wales, NP10 8XG
http://www.statistics.gov.uk
Consumer Price Indices, July 2012
Consumer Trends Quarter 1 2012
Employee Jobs by Industry, July 2012
Labour Market Statistics, August
2012
National Population Projections,
2010-based projections
Population Estimates for UK,
England and Wales, Scotland and
Northern Ireland Population
Estimates Timeseries 1971 to Current
Year, December 2011
UK Business: Activity, Size and
Location 2010 and 2011
United Kingdom Economic
Accounts, July 2012
Other Sources
Fast Food Nation
http://www.fastfoodnation.co.uk

Ofcom
Riverside House
2a Southwark Bridge Road
London, SE1 9HA
Telephone: 03001-233 000
Fax: 020-7981 3333
http://www.ofcom.org.uk

Retail Economics
Telephone: 020-3532 7356
E-mail: info@retaileconomics.co.uk
http://www.retaileconomics.co.uk

Zagat
76 9th Ave
4th Floor
New York, NY 10011
US
http://www.zagat.com
Key Note Sources
Key Note Ltd
5th Floor
Harlequin House
7 High Street
Teddington
Richmond Upon Thames, TW11 8EE
Telephone: 0845-504 0452
Fax: 0845-504 0453
E-mail: sales@keynote.co.uk
http://www.keynote.co.uk
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Ice Creams & Frozen Desserts
Milk & Dairy Products
Restaurants

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Understanding Consumer Survey Data
TGI tables, produced by Kantar Media, are generally based on one of the following groups:
households consisting of either one person living alone or a group of people, usually
members of one family, who live together and whose food and other household expenses are
managed as one unit; adults aged 15 or over; housewives a member of a private
household who is solely or mainly responsible for the household duties.
NEMS Market Research is often commissioned by Key Note to conduct exclusive consumer
surveys among a representative sample of adults aged 16 and over in Great Britain.
Number, Profile, Penetration
Tables used in Key Note reports may give figures for the Number, Profile, and/or Penetration.
Fast-Food & Home-Delivery Outlets Understanding Consumer Survey Data
Social Grade
This is normally based on the occupation of the Head of the Household, or if the Head of the
Household is retired, their former occupation. If this information is not available, social grade
is based on environmental factors such as type of dwelling, amenities in the home, presence of
domestic help, etc.
The following table broadly defines the six social grades used. The relationship between social
grade and net income of the Head of the Household is a complex one and readers should note
that income is not determinant of social grade.
Social Grade Social Status
Head of Households
Occupation
A Upper middle class Higher managerial,
administrative or professional
B Middle class Intermediate managerial,
C1 Lower middle class Supervisory or clerical and
junior managerial,
C2 Skilled working class Skilled manual workers
D Working class Semi and unskilled workers
E Those at lowest levels of
subsistence (no other earner)
State pensioners or widows
Standard Region
This is as defined by the Registrar-General.
Fast-Food & Home-Delivery Outlets Understanding Consumer Survey Data
Key Note Research
Key Note is a leading supplier of market information, publishing an extensive range of
consumer, industrial, business-to-business and services titles. With over 30 years experience,
Key Note represents clear, concise, quality market information.
For all reports, Key Note undertakes various types of research:
Online searching is carried out by product code or free search method, and covers the period
from the last edition of the report to the current day.
Trade sources, such as trade associations, trade journals and specific company contacts, are
invaluable to the Key Note research process.
Secondary data are provided by Kantar Media (TGI) and Nielsen for consumer/demographic
information and advertising expenditure, respectively. In addition, various official publications
published by National Statistics, etc. are used for essential background data and market trends.
Interviews are undertaken by Key Note for various reports, either face-to-face or by telephone.
This provides qualitative data (industry comment) to enhance the statistics in reports;
questionnaires may also be used.
Field research is commissioned for various consumer reports and market reviews, and is carried
out by NEMS Market Research.
Key Note estimates are derived from statistical analysis and trade research carried out by
experienced research analysts. Up-to-date figures are inserted where possible, although there
will be some instances where a realistic estimate cannot be made or external sources request
that we do not update their figures.
Key Note Editorial, 2012
Fast-Food & Home-Delivery Outlets Key Note Research
The Key Note Range of Reports
Key Note publishes over 180 titles each year, across both the Key Note and Market Assessment
product ranges. The total range covers consumer, lifestyle, financial services and industrial
sectors.
Title Edition Published
Key Note Current Reports
A
ABC1 Consumer 7 2012
Access Control 12 2011
Accountancy 15 2012
Activity Holidays 5 2012
Advertising Agencies 5 2012
Airlines 22 2011
Airports Update 15 2011
All-Inclusive Holidays 2 2012
Alternative Healthcare 7 2012
Arts & Media Sponsorship 4 2011
Automatic Vending 25 2011
Automotive Services 8 2012
Autoparts 20 2012
B
B2B Marketing 2 2011
Baby Products 5 2010
Baths & Sanitaryware 15 2011
Betting & Gaming 25 2012
Biscuits & Cakes 19 2012
Book Publishing 22 2012
Book Retailing on the Internet 4 2010
Bookselling 18 2012
Bread & Bakery Products 27 2012
Breakfast Cereals 16 2012
Breweries & the Beer Market 29 2012
Bricks & Tiles 16 2010
Bridalwear 5 2010
Builders Merchants 17 2010
Building Contracting 11 2011
Building Materials 14 2011
Bus & Coach Operators 11 2012
Business Postal Services 2 2008
Business Press 15 2012
Business Travel 6 2011
C
C2DE Consumer 6 2010
Canned Foods 18 2011
Care Homes 1 2011
Carpets & Floorcoverings 16 2009
Catering Equipment 14 2011
Catering Market 21 2009
Charity Funding 4 2011
Chemical Industry 14 2011
Childcare 7 2012
Childrens Publishing 4 2012
Childrenswear 9 2011
Chilled Foods 17 2012
China & Earthenware Update 28 2011
Cigarettes & Tobacco 26 2012
Closed-Circuit Television 13 2011
Clothing & Footwear Industry 13 2010
Clothing Manufacturing 16 2011
Clothing Retailing 8 2011
Coffee & Sandwich Shops 7 2012
Commercial Dynamics in
Financial Services 4 2010
Commercial Insurance for Small
Businesses 4 2012
Commercial Vehicles 16 2011
Computer Hardware 10 2012
Computer Services 10 2012
Computer Software 8 2011
Condiments & Sauces 5 2008
Confectionery 30 2012
Construction Industry 11 2009
Consumer Credit & Debt 7 2012
Consumer Magazines 18 2011
Contact Centres 8 2010
Contraception 5 2011
Contract Catering & Foodservice
Management 21 2010
Contract Cleaning 21 2010
Cooking & Eating Habits 7 2012
Cooking Sauces & Food
Seasonings 5 2012
Corporate Hospitality 7 2012
Fast-Food & Home-Delivery Outlets The Key Note Range of Reports
Corporate & Promotional
Giftware 4 2011
Cosmetic Surgery 10 2012
Cosmetics & Fragrances 25 2012
Courier & Express Services 16 2010
Cruise Market 3 2012
Customer Magazines 5 2012
Customer Relationship
Management 4 2008
Customer Services in Financial
Organisations 5 2010
D
Debt Management (Commercial
& Consumer) 6 2010
Defence Equipment 11 2010
Diet Foods 4 2011
Digital Broadcasting 6 2012
Digital Communications 2 2012
Direct Insurance 6 2010
Direct Marketing 20 2012
Direct Mortgages 8 2012
Discount Retailing 8 2011
Disposable Paper Products 13 2009
Distribution Industry 10 2009
DIY & Home Improvements
Industry 11 2009
Domestic Heating 14 2009
Drinks Market 19 2009
E
E-Commerce: The Internet
Grocery Market 6 2009
E-Commerce: The Internet
Leisure & Entertainment Market 5 2008
Electrical Contracting 10 2011
Electrical Wholesale 5 2009
Electricity Industry 8 2012
Electronic Banking 4 2008
Energy Industry 8 2010
Equipment for the Disabled 6 2012
E-Recruitment 4 2012
Estate Agents 18 2011
Estate Agents & Services 6 2012
Ethnic Foods 17 2012
European Long-Term Insurance 4 2008
European Renewable Energy 2 2008
European Short Breaks 2 2008
European Telecommunications 3 2010
European Tourist Attractions 3 2010
European Trends in Food
Shoppin 4 2009
Exhibitions & Conferences 12 2011
F
Fast-Food & Home-Delivery
Outlets 26 2012
Film Market 2 2009
Financial Services Marketing to
BCs 1 2009
DEs 2009
Start-Up Businesses & the Self-
Employed 3 2010
the Affluent 1 2009
Financial Services Organisations
on the Internet 4 2009
Fire Protection Equipment 9 2012
Fish & Fish Products 15 2012
Food Industry 20 2010
Football Clubs & Finance 4 2009
Footwear 17 2012
Forecourt Retailing 9 2012
Franchising 13 2012
Freight Forwarding 18 2011
Frozen Foods 25 2011
Fruit & Vegetables 22 2011
Fruit Juices & Health Drinks 13 2010
Functional Foods 6 2010
Further & Higher Education 7 2011
G
Garden Equipment 14 2012
Gas Industry 7 2012
General Insurance 13 2010
Giftware 20 2011
Glassware 16 2011
Green & Ethical Consumer 5 2012
Greetings Cards 27 2012
Grey Consumer 5 2009
H
Hand Luggage & Leather Goods 16 2012
Health Clubs & Leisure Centres 11 2011
Healthy Eating 6 2008
Holiday Purchasing Patterns 6 2012
Home Entertainment 4 2012
Home Furnishings 20 2011
Home Shopping 14 2011
Horticultural Retailing 17 2008
Hot Beverages 7 2012
Hotels 26 2012
Housebuilding 20 2012
Household Appliances (Brown
Goods) 12 2011
Household Appliances (White
Goods) 18 2012
Household Detergents &
Cleaners 17 2012
Household Furniture 19 2011
I
Ice Creams & Frozen Desserts
Update 15 2011
Independent Financial Advisers 4 2008
Insurance Companies 12 2009
Insurance Industry 10 2009
Insurance Market 13 2012
Insurance Prospects 2 2008
Internet & Telephone Banking 1 2011
Internet Advertising 7 2011
IT Recruitment 6 2012
IT Security 10 2011
IT Training 14 2012
J
Jewellery & Watches 26 2011
K
Kitchenware 8 2012
L
Laboratory Equipment 10 2011
Leisure in the Home 3 2010
Leisure Outside the Home 3 2010
Lifestyle Magazines 5 2011
Lingerie 10 2011
Local Government Services 3 2010
Low-Fat & Reduced-Sugar Foods 5 2008
M
Marketing in the Digital Age 4 2012
Meat & Meat Products 22 2011
Medical Equipment 18 2012
Medical & Health Insurance 4 2012
Men & Womens Buying Habits 6 2012
Mens Toiletries & Fragrances 6 2012
Metal Recycling 6 2011
Milk & Dairy Products 26 2012
Mobile Marketing 1 2009
Mobile Phones 8 2012
Motor Finance 4 2011
Motor Industry 12 2008
Music Industry 2 2010
N
Natural Products 3 2012
Newspapers 19 2012
Non-Food Sales in Supermarkets 5 2010
Non-Metal Recycling 4 2012
Nutraceuticals 3 2008
O
Office Equipment Industry 9 2010
Office Furniture 22 2012
Offshore Oil & Gas Industry 6 2012
Ophthalmic Goods & Services 18 2011
Opticians & Optical Goods 5 2010
Organic Food & Drink 8 2012
OTC Pharmaceuticals 15 2011
Over-50s Consumer 1 2009
Own Brands 14 2012
P
Packaging (Food & Drink) 6 2010
Packaging (Glass) 13 2008
Packaging (Metals & Aerosols) 13 2012
Packaging (Paper & Board) 16 2012
Packaging (Plastics) 16 2012
Pensions 6 2009
Personal Banking 2 2012
Personal Lines Insurance 5 2012
Personal Loans 4 2008
Pet Market 4 2009
Pharmaceuticals Industry 6 2008
Planning for Retirement 1 2008
Plus-Size Fashion 4 2011
Poultry 5 2012
Power Tools 6 2012
Premium Lagers, Beers & Ciders 10 2012
Printing 16 2011
Private Healthcare 22 2011
Protective Clothing & Equipment 8 2012
Public Houses 28 2012
Public Relations Industry 4 2012
Publishing Industry 13 2010
R
Rail Travel 8 2011
Ready Meals 13 2012
Recruitment Agencies
(Permanent) 12 2012
Recruitment Agencies
(Temporary & Contract) 12 2012
Renewable Energy 5 2012
Restaurants 26 2012
Retail Pharmacies 17 2011
Road Haulage 23 2012
Rural Economy 2 2009
S
Sauces & Spreads 13 2012
Savings & Investments 6 2010
Security Industry 13 2010
Shopfitting 15 2012
Shopping Centres 3 2008
Singles Market 5 2012
Slimming Market 4 2011
Small Businesses & Banks 2 2010
Small Domestic Electrical
Appliances 13 2012
Snack Foods 21 2012
Social Media Marketing 2 2012
Soft Drinks (Carbonated &
Concentrated) 19 2012
Soup Market 4 2012
Spirits & Liqueurs 2 2012
Sports Clothing & Footwear 14 2012
Sports Equipment 17 2012
Sports Market 13 2010
Sports Sponsorship 9 2012
Stationery (Personal & Office) 26 2012
Supermarket Own Label 4 2009
Sweet & Salty Snacks 16 2010
T
Take-Home Trade 18 2011
Teenage & Pre-Teen Magazines 5 2012
Teenage Fashionwear 3 2011
Timber & Joinery 20 2011
Toiletries 24 2011
Toys & Games 25 2012
Training 20 2012
Travel & Tourism Market 17 2010
Travel Agents & Overseas Tour
Operators 24 2012
Trends in Food Shopping 5 2008
Trends in Leisure Activities 5 2012
Tyre Industry 6 2011
U
UK Internet Market 1 2009
Utilities 4 2010
V
Vegetarian Foods 7 2012
Vehicle Breakdown Services 7 2012
Vehicle Security 10 2012
Video Gaming 1 2011
Vitamins, Minerals &
Supplements 7 2011
W
Wallcoverings & Ceramic Tiles 19 2012
Waste Management 11 2011
Water Industry 7 2012
Windows & Doors 21 2012
Wine 22 2012
Working Women 5 2009
Key Note Archive Reports
A
Aerospace 12 2003
Agrochemicals & Fertilisers 3 2002
Air Freight 2 2005
Air Transport Logistics 1 2003
Animal Feedstuffs 11 2001
Audio Visual Retailing 1 2000
B
Baby Foods 3 2006
Baths & Showers 1 2000
Bearings 2 2007
Beds, Bedrooms & Upholstered
Furniture 2 2000
Bottled Water 2 2001
C
Cable & Satellite TV 10 2004
Call Centres 6 2006
Cash & Carry Outlets 16 2001
Cinemas & Theatres 9 2001
Clothing Retailers 1 2000
Commercial Radio 8 2004
Consumer Borrowing in Europe 1 2004
Consumer Internet Usage 4 2000
Contracted-Out Services 3 2007
Convenience Retailing 12 2002
Cross-Border Shopping 1 2000
Customer Loyalty in the Financial
Services 1 2000
D
Dark Spirits & Liqueurs 3 2004
Defence Industry 7 2003
Design Consultancies 3 2000
Digital TV 2 2003
DINKY Market 3 2007
Document Imaging Systems 1 2007
Domestic Telecommunications 4 2006
Dry Cleaning & Laundry Services 5 2005
E
Electronic Component
Distribution 12 2002
Electronic Component
Manufacturing 11 2002
Electronic Games 4 2003
Equipment Leasing 12 2003
E-Shopping 1 2002
European Electricity Industry 3 2007
European Gas Industry 3 2007
European Oil & Gas Industry 2 2007
European Water Industry 3 2007
Extended Financial Families 1 2005
F
Factoring & Invoice Discounting 2 2003
Finance Houses 11 2000
ABC1s 1 2000
ABs 4 2006
C1C2DEs 1 2004
Over 60s 1 2004
the Retired & Elderly 3 2007
Fitted Kitchens 11 2007
Free-To-Air TV 8 2004
G
Generation Y 1 2007
Global Positioning Systems 1 2002
Global Waste management 2 2070
H
Health Foods 22 2003
Healthcare Market 10 2005
Heating, Ventilating & Air
Conditioning 9 2002
I
In-Car Entertainment 1 2000
Individual Savings Accounts 2 2005
Industrial Fasteners 8 2001
Industrial Pumps 5 2000
Industrial Valves 8 2001
Internet Service Providers 2 2005
Internet Usage in Business 8 2005
Issues & Challenges in the UK Life
Assurance Market 2 2002
Issues in Higher Education
Funding 2 2006
L
Leisure & Recreation Market 15 2005
Lighting Equipment 14 2002
M
Management Consultants 10 2003
Marketing to Children 4-11 3 2003
Mechanical Handling 9 2001
Millenium Youth 2 2002
Mobile Telecommunications 2 2007
N
New Media Marketing 3 2002
O
Off-Trade Spirits 3 2004
Organic Baby & Toddler Care 1 2007
Over-40s Consumer 2 2005
P
Paper & Board Manufacturers 14 2002
Passenger Travel in the UK 5 2007
Pay TV 2 2004
Pension Extenders 1 2002
Photocopiers & Fax Machines 14 2005
Plant Hire 13 2007
Plastic Cards in Europe 2 2005
Plastics Processing 10 2003
Pre-School Childcare 1 2001
Private-Sector Opportunities in
Education 2 2001
Process Plant Industry 1 2000
Public Transport 1 2001
R
Rail Transport Logistics 1 2003
Railway Industry 2 2006
Recycling & the Environment 1 2000
Retail Credit 2 2000
Retail Development 1 2001
Road Transport Logistics 1 2003
S
Saving Trends in Eurozone 2 2002
Short Break Holidays 4 2001
Short Breaks 2 2004
Slimming Market 8 2000
Small Office Home Office
Consumer 1 2001
Small Office Home Office
Products 1 2001
Sponsorship 2 2000
Supermarket Services 3 2007
Supermarkets & Superstores 20 2003
T
Teenage Magazines 3 2007
Telecommunications 21 2007
Teleworking 2 2003
The Computer Market 11 2004
The Film Industry 4 2002
The Fish Industry 1 2001
The Legal Services Market 1 2005
The Luggage Market 1 2000
The Newspaper Industry 3 2005
Tourist Attractions 5 2001
Tweenagers 1 2001
V
Video & DVD Retail & Hire 8 2005
Videoconferencing 4 2007
W
Water Transport Logistics 1 2003
White Goods 2 2000
White Spirits 1 2005
Women over 45 3 2007
Key Note Ltd 2012
All rights reserved.
No part of this publication may be reproduced, copied, stored in an electronic retrieval system or transmitted
save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act
1988.
Published by Key Note Ltd, 5th Floor, Harlequin House, 7 High Street, Teddington, Richmond Upon Thames,
TW11 8EE. Telephone: 0845-504 0452
Stringent efforts have been made by Key Note to ensure accuracy. However, due principally to the fact that
data cannot always be verified, it is possible that some errors or omissions may occur; Key Note cannot accept
responsibility for such errors or omissions. Details supplied by Key Note should only be used as an aid, to assist
the making of business decisions, not as the sole basis for taking such decisions.
Under the new Privacy and Electronic Communications Regulations 2004, it is unlawful for a business to make
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Key Note Ltd holds and regularly updates (every 28 days) its data in accordance with the regulations and
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these data are up to date; Key Note Ltd does not hold itself liable for any subsequent legalities.
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Market Report Plus 2012

26th Edition October 2012

restaurant chain 29,138 31,952

43.6 45.6 56.5

15.5 20.3 70.7

43.6 31.7 10.3

15.5 37.3 34.1

43.6 48.8 44.7

15.5 20.5 52.7

43.6 49.1 33.1

15.5 11.1 21.0

43.6 44.1 59.8

15.5 13.3 50.7

43.6 43.9 43.4

15.5 20.8 57.8

43.6 46.3 68.2

15.5 18.6 77.1

43.6 45.3 57.0

15.5 19.1 67.6

8,488 8,424 8,865

299 264 259

3,129 3,297 3,531

3,428 3,561 3,790

2,537 2,502 2,336

687 698 639

(%) 3.4 2.6 2.9 3.4 3.4

(million) 1.60 1.67 1.61 1.51 1.40

209,863 38,789 25/12/11

18,906 -1,965 26/12/10

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